COMMUNICATION POLICY AND PUBLIC INTERESTS:
MEDIA DIVERSITY IN PUBLIC AND COMMERCIAL BROADCAST TELEVISION
IN THE U.S.
Kim McCann
A Dissertation
Submitted to the Graduate College of Bowling Green
State University in partial fulfillment of
the requirements for the degree of
DOCTOR OF PHILOSOPHY
December 2007
Committee:
John J. Makay, Advisor
Bill O. Coggin
Graduate Faculty Representative
Joseph Oliver Boyd-Barrette
Louisa Ha
© 2007
Kim McCann
All Rights Reserved
iii
ABSTRACT
Promoting media diversity in a society is imperative for the social benefits that
allow citizens to make informed decisions through exposure to a broad range of
viewpoints. In spite of its significance, two major hindrances to media diversity identified
so far are conceptual disagreement, that renders divergent approaches to the diversity
analysis, and market forces, in which media are centered on a profit seeking mechanism.
Responding to these two major issues of media diversity, the study explored the policy
effectiveness within the notion of the First Amendment conflict and assessed diversity in
both the public and commercial broadcast television industries.
This study proposed the integrated theory of diversity, which could identify multiindicators of the dimension of the diversity, such as source, content, and audience
diversity; thus, it allowed assessment of the multi-levels within political and economic
contexts. The application of the public sphere model helped establish public interest
criteria and thus could provide more consistent policy goals in promoting media
diversity. The structural conduct model allowed assessment of source diversity by
identifying the relationship among the market structure of the broadcast television
industry, product strategies, and diversity. The application of the public policy model and
the program choice model allowed measurement of content diversity distinctively
produced by both public and commercial broadcast television by identifying different
programming strategies.
The analyses of the study provided three major substantial findings: 1) Conceptual
disagreement of media diversity and ineffectiveness of the policies on media diversity
largely stemmed from the FCC’s inconsistency in establishing public interest criteria.
iv
This inconsistency hindered justification of any regulatory intervention to protect public
interest and to effectively respond to market failure in terms of media diversity. 2) The
diversity offered by public and commercial broadcast televisions was different in terms of
programming strategies, types of programs produced, and both number of channels and
diversity level offered. The critical variables influencing the diversity were a moral
obligation to serve the public interest in public television and the economics of
programming in commercial broadcast television. 3) The expressive function of media
diversity, reflecting audience demand on media content, is problematic because it
basically obeys a majoritarian rule that satisfies the immediate gratification of as many
audiences as possible, and audience gratification in accessing ideas is rarely balanced, nor
is it on the basis of rational demands.
v
ACKNOWLEDGMENTS
The following dissertation, while an individual work, benefited from the insights
and direction of several people. Thanks are due first to my Dissertation Chair, Dr. John
Makay, for inspiring and mentoring me with his unlimited support, guidance,
perspectives, and sense of humor. My sincere thanks go to Dr. Joseph Boyd-Barrette,
who exemplifies the high quality scholarship to which I aspire, providing me insights that
guided and challenged my thinking. The author extends sincere gratitude to Dr. Louisa
Ha, who inspired me to embark on the subject of the dissertation and provided me with
instructive comments and evaluation that helped me clarify things related to my academic
works. In addition, I wish to thank my outside committee member, Dr. Bill Coggin, who
devoted time at the later stage of the dissertation process, yet helped me substantially
improve the quality of the finished project. I might not have been able to make it without
the support of each of these people. Lastly, I would like to thank my husband for
providing me with the opportunity to gain this tremendous education and the necessary
tools to succeed in life.
vi
TABLE OF CONTENTS
Page
v
ACKNOWLEDGMENTS ............................................................................................. iii
ABSTRACT................................................................................................................... vi
LIST OF FIGURES......................................................................................................... viii
LIST OF TABLES........................................................................................................... ix
CHAPTER
1
BACKGROUND OF THE STUDY.....................................................................
Media Diversity and Central Issue........................................................................
Open Communication System and the Public................................................
Diversity Standards, Market Force, and Media Policy..................................
Research Problems................................................................................................
Research Objectives and Questions......................................................................
Significance of the Study......................................................................................
Organization of the Study.....................................................................................
1
1
2
3
5
10
12
12
2
LITERATURE REVIEW.....................................................................................
Media Diversity Approaches................................................................................
Supply and Demand Viewpoints: Economic Approach................................
Source, Content, and Audience Diversity: Political Approach.....................
Defining Media Content: Open and Reflective Diversity.............................
The Impact of Market Forces on Diversity..........................................................
Ownership and Content Distribution.............................................................
Competition and Concentration in Broadcasting Media...............................
Media Nature as Profit Maximizing Mechanism..........................................
Different Strategies of Public and Commercial Broadcasters......................
Regulation on Concentration.........................................................................
Policy Effectiveness .....................................................................................
18
18
18
20
22
25
25
26
28
30
32
35
3
THEORIES AND METHODOLOGIES..............................................................
Theoretical Foundation.........................................................................................
Social and Economic Theories......................................................................
Proposed Theoretical Framework.........................................................................
Program Choice and Public Policy Model.....................................................
Structure Conduct Performance Model..........................................................
Public Sphere Model......................................................................................
Research Methodology.........................................................................................
Qualitative Methodology...............................................................................
Quantitative Methodology.............................................................................
41
41
41
49
49
51
55
56
59
62
vii
4
FCC, POLICIES, AND MEDIA DIVERSITY......................................................
The Policy Goals and Diversity............................................................................
Free market Competition Versus Regulation.................................................
The Government’s Role in Media Regulation,..............................................
Regulating Broadcasting: Establishing Public interest Standards.................
Media Policies and Diversity................................................................................
Antitrust and Criteria: Regulations on Concentration....................................
Early Broadcast Ownership Concerns and Issues..........................................
Multiple-Station Ownership Rules........................................................................
Ownership Rules under Numerical Limits of Stations...................................
Consideration of Economic Potentials...........................................................
Telecommunication Act of 1996...........................................................................
Syndication Rules and PTAR................................................................................
68
69
69
73
76
78
79
81
83
83
88
92
95
5
MEASURING DIVERSITY.................................................................................
The Structure of Broadcast Television Networks.................................................
Diversity in Public Television..............................................................................
The Impact of Policy Preferences on Ownership Structure...........................
The Impact of Policy Preferences on Program Content.................................
Concentration of Suppliers and Program Content Diversity..........................
Diversity in Commercial Broadcast Television....................................................
Advertiser-Supported Mechanism and Market Concentration.......................
Measuring Market Concentration...................................................................
Measuring Program Content..........................................................................
Audience Diversity........................................................................................
107
107
110
112
118
120
125
126
129
137
144
6
FUTURE DIRECTION OF MEDIA DIVERSITY..............................................
Discussions and Suggestions................................................................................
Policy Goals and Developing Public Interest Standards................................
Concentration and Competition in Distribution and Production Systems.....
Public Television and Promoting Quality Dimension of Diversity................
Methodological Limitations............................................................................
151
153
154
158
161
164
APPENDIX
A
CORPORATE OWNERSHIP AND O&O STATIONS...................................... 168
B
PUBLIC TELEVISION PROGRAMMING CONTENT..................................... 170
C
PROGRAM CODES FOR COMMERCIAL BRODCAST TELEVISION.......... 171
D
COMMERCIAL NETWORK PRIME-TIME TYPES......................................... 172
REFERENCES................................................................................................................. 174
viii
LIST OF FIGURES
Page
Figure
2.1
3.1
3.2
3.3
Group Ownership of U.S. Television Stations. 1950-1980..................................19
Dimensions of Media Diversity............................................................................44
Assumptions of the Public Sphere and Market Models........................................47
The Relationship among Diversity, Policy, and Two Conceptual
Paradigms...................................................................................................................
48
3.4 Market Structure Proposed by the Theory of the Firm.........................................52
3.5 Typology of Market Structure...............................................................................54
3.6 Proposed Theoretical Framework..........................................................................57
3.7 Methodological Framework: Statistical index and indicators................................58
5.1 Public Television Channels. 1960-1980................................................................113
5.2 Diversity Index of Producer, Distributor, and Program Content in
Public Television....................................................................................................122
5.3 Network Television Cost: Primetime, Daytime, Early Evening, and Late
Evening (Cost per 30 sec). Constant Dollar Base (2007)......................................127
5.4 Herfindahl Index: Concentration based on Number of Affiliates Share
by Commercial Television Broadcast Networks, and Non-Networks.
1950-1987..............................................................................................................130
5.5 Herfindahl Index: Concentration based on Advertising Revenue Share by
Commercial Broadcast Television. 1965-2003......................................................131
5.6 Advertising Revenue for Commercial Broadcast Television by %.
1965-2003..............................................................................................................132
5.7 Open and Reflective Diversity in Commercial Broadcast Television.
1965-2002..............................................................................................................138
5.8 Program Types Supplied by Networks during Prime Time. 2000-2006................141
5.9 Herfindahl Index: Audience Diversity. 1965-2003................................................145
5.10 Channels Receivable vs. Viewed. 2005.................................................................149
6.1 The Integrated Theory of Media Diversity.............................................................
152
ix
LIST OF TABLES
Page
Table
4.1
4.2
4.3
4.4
4.5
4.6
5.1
5.2
5.3
5.4
5.5
5.6
5.7
5.8
5.9
Group Ownership of U.S. Television Stations. 1950-1980................................ 87
Group Ownership of U.S. Television Stations. 1950-1980................................ 87
Group Ownership and Number of TV Groups. 1985-1995............................. 89
VHF/UHF Educational and Commercial Channels. 1985-1995........................ 90
Group Ownership and Number of TV Groups. 1997-2002................................ 93
Four Major TV groups and Corporations Broadcasting in 2005........................ 104
Federal Government Funding for Public Broadcasting Revenue.
1970-2000........................................................................................................... 115
Public Broadcasting Revenue by Public Television. 1999-2000........................ 116
Public Television Producers and Distributors. 1974-1996.................................. 117
Public Television Programming Content by Categories...................................... 119
Leading Network Suppliers: Prime Time. 1970 & 1977 Share of
Programming........................................................................................................ 134
Leading Network Suppliers: Prime Time. 1989, 1994, & 2002
Share of Programming......................................................................................... 136
Average Network Rating. 1980-2005.................................................................. 143
Audience Rating of Program Content. 1965-2003............................................... 146
Number of Channels Available and Viewed in the Average
U.S. Home............................................................................................................ 149
1
CHAPTER 1
BACKGROUND OF THE STUDY
Media diversity has been a central issue reinforced through a demand of media
serving public interest. In spite of its significant role in informing citizens with a wider
exposure to different viewpoints and facilitating the democratic process of citizens’ wellpoliticized decisions, a sound guideline for media diversity studies has been lacking in
conceptual agreement, and accordingly, the standard of assessment. My project focuses
on these aspects and attempts to provide a better paradigm for a comprehensive
assessment of media diversity. The following addresses 1) the central issues of media
diversity, 2) the research problems, 3) the research objectives, 4) research questions of
the project, and 5) significance of the study.
Media Diversity and Central Issues
The critical interrelationship between media and democracy in a society has often
been debated, primarily due to the presumption that media exercises a critical public role.
It is undeniable that the functions of media communication and media entities are all
encompassing and the dominant force in a society. The pervasiveness of mass media in
today’s world and its impact on our social life raise concern for the significance of media
serving social and political duties; that is in part to provide a basis for citizens to be well
politicized and actively participate in the democratic process. In this way, whether or not
citizens take an active role in making democratic decisions largely hinges on issues of
legitimacy of media and accountability for serving the public interest.
Consistent with the fundamental assumption of media’s essential dependence on a
society (see McQuail, 1994 for the critical relationship between media and society),
media serving public interest is enforced throughout a system that demands media
2
diversity. Media diversity, according to McQuail (1994), is one of the main issues
connected to the principle of media performance that offers maximum diverse content to
citizens. Promoting media diversity in a society is imperative for the following social
benefits: first, it allows citizens to make informed decisions through exposure to a broad
range of standpoints; second, it brings innovative ideas to forums of public debate while
critically examining the established consensus; and third, it provides marginalized
cultural groups an opportunity to sustain their distinctive identities in a larger society.
Therefore, the inquiries into media diversity relate to the contribution of media to the
democratic public life with an effort to increase mutual understanding of conflicting
social views (Croteau & Hoynes, 2006; McQuail, 1994; Van Cuilenburg, 1999). To
clarify such a democratic function of media, McQuial (1992) states, “ Media diversity
contributes to social order by promoting free expression of discontent or disagreement
and by offering pathways to compromise” (p.144). Hence, media diversity valorizes the
significance of media diversity in serving a vital role of democracy and also provides a
sound reflection of public interest to achieve a mutual consensus of conflicting views in a
society.
Open Communication System and the Public
The inquiry into media diversity has been forged within the principle of the First
Amendment with freedom as a key concept (Einstein, 2004; McQuail, 1994; Napoli,
1999a); that is, the utilization of an open communication system where diverse opinions
are freely expressed and exchanged. Although achieving absolute freedom of public
communication shouldn’t be the goal, due to respect for the “public good” of a society (or
societal need), the expected freedom in a democratic society mainly concerns media
3
independence from the potential controls of those who are in power and influenced by
political or economic interests. Media independence, therefore, functions to stimulate
autonomous views including informed, substantive, unbiased, and innovative ideas in a
society (Croteau & Hoynes, 2006; Einstein,; McChesney, 2004; McQuail, 1992 & 1994).
These roles of media are considered the key elements for media to fulfill a quality
performance in terms of promoting diversity.
Diversity Standards, Market Force, and Media Policy
In fact, striving for media diversity is in part to request quality performance of
media, which is mainly linked to the notion of providing social duties and serving the
public interest. Although the quality dimension of media performance may seem abstract,
it entails “the context of value” (Cavallin, 2000, p. 132), that is, “the ultimate objective
of diversity studies.” The quality of diversity, in this way, manifests itself in media’s
general responsibility that attempts to provide socially desirable content with a greater
substance of cultural/social and political varieties (heterogeneous content) while avoiding
duplication of content that only targets mainstream audiences and serves popular
demands (homogenized content). In this effort, the quality performance of media can be
interpreted as a requirement of media firms to serve social duties grounded in public
interests over organizational interests. In other words, to meet diversity standards, media
should encourage “independent thoughts and expressions,” “innovative content even if
not popular,” and “participation through diverse information” which should be achieved
within a self-governed media system. When media do not meet these standards, it is
assumed that media diversity has failed. Consistent with the principle of media
performance within the European Union (EU), these general standards of media diversity
4
clearly define the meaning of the heterogeneity of media content that meets these
principles of media diversity (see Croteau & Hoynes, 2006; D’Haenens et al., 2005; Van
Cuilenburg, 2000 for the principle of media diversity).
Although media performance of promoting diversity should be achieved through
media independency, and within a self-governed media system, this role of media has
been rigorously contested by many scholars. The fundamental proposition of these
inquires challenge whether the current media and media system meet the standards of
media diversity. One identified major hindrance to media performance among scholars is
the market force, suggesting the imminent need of recognizing the system of media
centered on a profit seeking mechanism in the modern capitalist society (McChesney,
1997). The discernment of the impact of market forces on media diversity highlights the
current criticisms and issues on media serving a public role in promoting media diversity.
Briefly, first, the media supply (ideas provided by media preferences) equivalent to
audience demands (ideas reflecting audiences’ preferences) doesn’t necessarily summon
societal standards for media diversity, and second, unregulated markets won’t necessarily
formulate a media supply that suitably reflects audience’s demands (Brown, 1996;
D’Haenens et al., 2006). The first concern is related to the criticism of the
commercialization of media because media maximizing audience demands on the basis
of profit motives won’t necessarily produce socially desirable content. The second
concern involves the critical role of the states and regulatory system to protect public
interests because the media market is inherently amoral to meet public interest standards.
As scholarly attention is given to the emergent idea of media diversity, the studies
have been largely conceptualized within the dimension of content diversity (e.g., program
5
type, format, or genre), source diversity (e.g., ownership and workforces), and access
diversity (e.g., audiences’ access to media content) (see Napoli, 1999a, 1999b, & 2005).
The most widely studied focus of media diversity within electronic media, so far, has
been the direct investigation on market concentration and competition in relation to
content diversity; that is the study of the critical relationship between source and content
diversity (e.g., Anderson; Dominick & Pearce; Hellman & Soramaki; Lin; Rothenbuhler
& Dominick; Van Cuilenberg; Van der Wurff, etc.). The dimension of source diversity is
often tied to the issue of concentration in the media market, recognized as a major
hindrance of media diversity. For that reason, the policy on media diversity in the
electronic media has often focused on source diversity with the goal of achieving a
plurality of sources (including both concentration of outlet and producer) in the media
market environment, in order to ensure a diverse content of media. In this way, the
policy, essentially involves government intervention in the media markets, mainly
because the media policy established within the European Union (EU) demands media to
produce freedoms of communication, media access, and media diversity in their markets
(D’Haenens et al., 2005). If media do not fulfill these demands, it is assumed to be
market failure, which essentially justifies regulatory intervention to promote diversity in
the media market.
Research Problems
Responding to the current issues and criticisms on media diversity explained
above, this project mainly focuses on the impact of the market force on media diversity
with its relationship to media policy. The major problems that formulate the purpose of
this project are insufficient reviews on 1) whether ensuring the plurality of source under
6
close investigation of market concentration will promise content diversity; thus, source
diversity should be the major foci in developing a coherent body of current media policy;
2) whether developing consistent public interest criteria, the fundamental underpinning of
the diversity standards, will be necessary for implementing adequate policy on media
diversity; and 3) whether divergent approaches to media diversity limit a comprehensive
assessment of media diversity.
Regarding the first problem, as previous research has evidenced, the relationship
between concentration and content diversity hasn’t been explicitly explained due to the
contradictory outcomes of the research. These contradictory outcomes subsequently
obfusticate the development of the conceptual paradigm of media diversity as well as a
clear direction for implementing media policy. The current suggestion of the media
diversity study, the need for a close investigation on contradictory results with an inquiry
of various determinant factors for media diversity (see D’Haenens, 2005; Hellman;
2001), mainly corresponds to the concern explained above. The several issues debated
within the study, relating to these concerns, were the ineffectiveness of media policy that
ignores a specific market condition, and the insufficient examination of source diversity
that focuses on a plurality of sources with a lack of concern for market power (see
D’Haenens, 2005; Einstein, 2004a; Napoli, 1999a). Source diversity should entail the
assessment of market force in the media environment considering both a high
concentration of outlet (e.g., insufficient numbers of media channels) and market power
(e.g., monopolistic control on the basis of market share) in assessing media diversity.
This will challenge the general assumption that plurality of source is a major determinant
of maximizing diverse content, or is sufficient enough to explain the critical relationship
7
between source and content diversity. Although ensuring plurality of source is a
necessary condition for media diversity, market power based on market shares, and its
impact on different market conditions should be additionally investigated in relation to
the policy goals for developing a comprehensive assessment of media diversity.
The second problem relates to the inconsistency of developing public interest
criteria. Recently, the public interest standards are defined by consumerist values (Van
Cuilenburg & McQuail, 2003) rather than societal values. The ideological shift from
collective authority (public sector) to market individualism (private sector) along with the
deregulation climate undermines the states’ role to protect public interests. However,
several media scholars (e.g., Croteau & Hoynes, 2006; McChesney, 1997; McQuail,
1994, etc.) addressed the critical role of the states and regulatory system to protect public
interests because the media market is inherently amoral in meeting public interest
standards.
The last problem stems from the divergent approaches to media diversity
proposing different standards of assessment as well as media policies relevant to media
diversity. Within the EU, market concentration involves the “supply point of view” and
“demand point of view.” The supply viewpoint assesses ownership and editorial
concentration in relation to content of media, whereas the demand viewpoint measures
audiences’ preferences of ideas and opinions (D’Haenens et al., 2005). In other words,
the supply viewpoint emphasizes a critical function of media where content diversity
should be achieved through media supplying diverse content for citizens. On the other
hand, the demand viewpoint emphasizes an expressive function of media where content
diversity should be achieved thorough media reflecting audience demands on media
8
content. These two approaches inherently generate a different direction of media policy
either on “regulation” or “free market competition” in achieving media diversity. In
general, market proponents stemming from the economic function of media believe that
diversity is achieved through free market competition without regulation because the
media market will satisfy audiences’ demands for their profit seeking mechanism. In this
way, the efficiency of the market system will promise to create diverse voices in society.
However, social scientists stemming from the social function of media believe that
intervention is necessary for media diversity to meet the standards of societal needs
because media are public resources that should inform citizens helping them to be well
politicized and capable of making informed decisions (Einstein, 2004a; McChesney,
1997).
The unparallel approaches, inconsistency of developing public interest criteria,
and different outcomes of the impact of market concentration all together challenge the
unified assumption of media diversity previously used, and address the imminent need
for more flexible, yet coherent standards of media diversity. The current underlying
issues on media diversity, which formulate the research questions are first, both
regulation policy and market competition have the “law of diminishing return” that
requires an optimum balance otherwise it becomes detrimental rather than beneficial
(D’Haenens et al., 2005). For example, although a certain degree of competition is vital
to promote diversity (necessity of a certain degree of pluralistic media outlet), excessive
competition can be as harmful as a monopoly. Second, an active role of the states to
protect the public interest, which necessitates justification of regulatory system, should be
achieved though developing consistent public interest criteria that can serve as the
9
yardstick in measuring democratic performance of media diversity. Therefore, media
diversity should be defined as “central elements of a healthy public sphere” (Croteau &
Hoynes, 2006, P. 16). The literature building on Habermas’s work on the public sphere
has argued that mass media should contribute to democratic processes not by targeting
potential consumers but by serving citizens; thus, the media system is central to the
constitution of citizenship. As Croteau and Hoynes (2006) state, media are citizen
resources, not mere consumer products because the products of media are cultural and
political goods, distinguished from many other goods. Therefore, the current public
interest criteria defined by consumerist values should be redefined with an effort to
constitute citizenship. In this effort, the justification of the regulatory system to protect
public interests is critical because media market with a profit-seeking goal tends to be
amoral to constitute citizenship (see Croteau & Hoynes, 2006; McChesney, 1997). Third,
a rigid application of the one sided approach either on supply or demand, might fail to
interpret the impact of market concentration in different market conditions, including
both cost structures (supply) and audiences’ expression (demand). When assessment
focused on the supply perspective, it only measures ownership and outlet concentration
whereas if the focus is on the demand perspective, then, its measurement is limited to
audiences’ choices. In other words, combining supply and demand viewpoints reflecting
both open and reflective diversity appears to be an ideal assessment of media diversity in
terms of the democratic function of media. Finally, the outcomes of concentration and
competition strategies largely depend on media organization types (e.g., public or
commercial broadcasters) in the media industry (Baker, 2001; D’Haenens et al., 2005).
Thus, the assessment of media diversity requires a more sophisticated and specified
10
measurement, suited to each of the different media market conditions. Brown (1996)
addresses the importance of acknowledging distinctive broadcaster types in assessing the
impact of the market force on media diversity. He states that public broadcasters may
have more intention to provide quality content with elitist programming, yet may be less
attractive to larger audiences than commercial broadcasters who aim for profit
maximization (referred in Haenens et al., 2005). Hence, different types of broadcasters
can initially have different motivations in offering content, which in turn validates the
need for an individual assessment of media diversity in different broadcastings.
Recapitulating the foci addressed by the central issues of media diversity, the impact of
market forces on media diversity essentially entails a more flexible approach suited to
different market conditions as well as organization types.
Research Objectives and Questions
Responding to the central issues of media diversity, my project primarily focuses
on the impact of the market force on media diversity in the context of political economy.
More specifically, the project closely investigates the critical relationship between
broadcasting policy and media diversity, and measures media market concentration in
relation to content diversity in the U.S. broadcast television industry. The rationale for
choosing the television broadcast industry is based on the assumption that broadcast
television, although new media are widely available, still plays a significant role as being
the primary source of news and entertainment in the U.S. (FCC, 1996). Another rationale
for choosing the television industry relates to the fact that television is the leading
medium subjected by commercialization in the U.S. According to Universal McCann
U.S. advertising report (2005), television has been the top medium for advertising
11
volume among other media outlets. Since my project deals with the market concentration
effects on media diversity, the broadcast television market which is often influenced by
advertiser- supported mechanism in serving media diversity, would offer me a condition
for market analysis.
To achieve the goal of the study, the project takes both supply and demand
viewpoints into account in approaching media diversity in commercial broadcast
television, and discretely measures media diversity in both public and commercial
broadcast television. In this effort, the ultimate purpose of the project is to suggest
comprehensive standards of media diversity assessment for a more adequate
implementation of media policy suited to today’s complex media market. With the
primary inquiry of market concentration in the current U.S. broadcast television industry,
the key research questions the project addresses are as follows:
•
What role do current broadcasting polices play in media’s current tendency
toward concentration in the U.S. broadcast television market? Do they
hinder/or facilitate media diversity?
•
Can developing consistent public interest standards make justification of a
regulatory system and active role of the state to promote media diversity?
•
How does media market concentration influence media diversity in different
types of broadcast television in the U.S. (e.g., public and commercial
broadcast television)?
•
How does public television differ from commercial television in terms of
serving diversity?
12
•
Can the application of the mix of both supply and demand viewpoints to the
diversity assessment satisfy the needs for improvement of the conceptual
framework in a specific media market condition, thus provide grounds for an
adequate implementation of media policy?
Significance of the Study
As my study attempts to respond to the criticism of recent diversity problems
raised, it can contribute to a specific significance in the media diversity field. First, with
an in-depth analysis of diversity policy goals within the Fist Amendment issue, it
explicates the long-term conflict of the notion, a key factor of convoluting media policy
as well as media diversity approaches. Therefore, it can possibly provide a clearer
guideline for establishing public interest standards, and accordingly, diversity policy
objectives which have been suffering from an insufficient review of the First Amendment
conflict. Second, with the employment of multimeasure methodologies that allow an
assessment of the interrelationship between source, content, and audience diversity, in
conjunction with the combination of both supply and demand viewpoints, it can provide a
more sophisticated assessment of media diversity. The demand perspective is particularly
useful in assessing the diversity of the commercial broadcast television industry, which
obeys the economic formula for satisfying audience demands. Media diversity, as
Hellman (2001) points out, is a multidimensional concept that wouldn’t be sufficiently
measured by a single method. The overall measure of media diversity should reflect all
possible dimensions of media diversity that include influential indicators, such as source
and audience diversity, but also how these indicators influence program content (content
diversity) that is measured by supply and demand viewpoints. Although, the ultimate goal
13
of media diversity is to achieve diverse media content, analyzing critical relationship
them is equally important to explicate compounding effects of diversity, produced
interdependently. Third, the study can provide useful answers for the rising concern of
reduced-quality programming in commercial broadcast television. The study
distinguishes the diversity objectives between public and commercial broadcast
television, to provide an answer for whether the distinctive nature of each market will
generate a different dimension of media diversity. Thus, it identifies specific motivational
goals or driving forces in the production of programs in each of public and commercial
broadcast television. The attempt to analyze the distinctive nature of each public and
commercial broadcast television will certainly be useful if public broadcasting is proven
to be a factor for increasing the quality programming; which means, sustaining the
presence of public broadcasting which is somewhat free from external market forces, can
be the one possible solution for promoting the quality dimension of media diversity.
Organization of the Study
In brief, the areas covered in the project mainly attempt to answer the research
questions stated above; they are 1) the relationship between media policy and the current
U.S. broadcast television market structure 2) the influences of market concentration in
commercial broadcast TV, and the particular political preferences in public television
based on program content, and 3) the justification of the proposed assessment of media
diversity to the implication of media policy for a future study of media diversity.
Chapter 1: Background of the Media Diversity Study
Chapter 1 addresses the background of the study, which provides a general map
for the project focus. It addresses the central issues of media diversity, which explains the
14
significance of the study, and in turn formulates the research problems. In this chapter,
research questions along with research objectives are stated. At the end of the chapter, the
organization of the study, accompanied with a brief summary of each chapter, is
introduced to clarify the highlight of the study investigated and examined throughout the
project.
Chapter 2: Literature Review
Chapter 2 provides a literature review including different approaches to the logic
of the market concentration model in broadcasting markets, and research outcomes that
measured the relationship between concentration and content diversity. The
comprehensive analysis on the raised issues and problems taken from the previous studies
are thoroughly examined in terms of media diversity. The impact of market forces,
identified indicators of hindrances to media diversity, different strategic concentration in
different market conditions, and changing policy objectives in terms of media diversity
are addressed in order to provide a comprehensive understanding of media diversity and
its foci.
Chapter 3: Theoretical and Methodological Frameworks
Chapter 3 examines the theoretical and methodological foundations of media
diversity. Throughout the analysis of existing theories, and practiced methodologies, it
also provides a theoretical and methodological framework for the project. In addressing
the conceptual development of media diversity, the widely accepted concepts of media
diversity, such as open diversity, and reflective diversity, are explained for illustrating the
principles of social and economic theories used in media conceptualization and
assessments. It also provides justification for integrating the standpoint of both open and
15
reflective diversity in defining media diversity because each model has its own limited
approach when applied solely to the assessment of media diversity in the current complex
media market condition. In this effort, various models relevant to media diversity
grounded in each of social and economic theories are reviewed and examined so as to
develop the proposed conceptual framework and methodologies for this study. This
attempt is to justify media serving public duties over organizational interests in
promoting media diversity that should be conceptualized within a firm establishment of
public interest standards.
Chapter 4: FCC, Policies and Media Diversity
Chapter 4 is an overview of current media policies relevant to media diversity
and their influence on market concentration in U.S. broadcasting. Key media policies,
largely implemented by the Federal Communications Commission (FCC), on creating
media diversity are also reviewed and interpreted to explain the policy objectives and
effectiveness. This effort seeks to learn what public interest standards have been applied
in terms of media diversity policies, and what way the policies that shape the broadcast
television market system, promote/hinder media diversity. The effectiveness of media
policies on diversity is examined and discussed with an inquiry into the conflicting views
of the First Amendment in terms of regulation and free market competition. This attempt
is to illustrate whether an active role of government promoting media diversity can be
made justifiable. Moreover, it attempts to validate the critical relationship between source
diversity and content diversity by addressing the significance of investigating source
diversity accompanied with relevant media policies in studying media diversity.
16
Chapter 5: Measuring Diversity
Chapter 5 assesses media diversity in the commercial and public broadcast
television industry. The different motivational factors influencing programming are
addressed and analyzed in each of commercial and public broadcast television. The level
of market concentration in terms of advertising revenue, political preferences, and
audience preferences are examined in relationship to program content offered by both
public and commercial broadcast television networks. The structural inequality (market
share), the efficiency of competition (plurality of outlet), and audience ranking are
thoroughly examined in response to economic motivation of the commercial television
industry while the ownership structure (distributors, and producers), and program content
influenced by political shifts are examined in response to the political motivation of
government. Lastly, content diversity in each of commercial and public broadcast
television is comparatively examined. This attempt is to address the need of developing a
more sophisticated approach in identifying determinant factors of program content when
applied to different types of broadcast television for the diversity analysis.
Chapter 6: Future Direction of Media Diversity:
Chapter 6 provides the future direction of media diversity in terms of
communication policy, areas of focus, and methodological issues, guided by the findings
of the study. It suggests how communication policy on media diversity should be
achieved, and how regulatory concepts should be defined in response to the outcomes of
the study. It addresses that the presence of public television can be a significant
alternative to commercial broadcast television in achieving the quality dimension of
media diversity. The methodological shortcomings, observed throughout the study, are
17
discussed as a means of suggesting a better way of validating the assumptions proposed
within media diversity studies.
18
CHAPTER 2
LITERATURE REVIEW
Media Diversity Approaches
Supply and Demand Viewpoints: Economic Approach
Media diversity has been widely studied within the notion of media serving the
public interest. The common inquires of diversity performance analysis rest on two
divergent approaches of media diversity; that are supply and demand viewpoints with
different implications developed mainly from economic law (see Brown 1996; Van
Culenburg, 2000; Van der Wurff, 2004a & 2004b). The goal of achieving pluralistic
supplies (supply viewpoint) and expressing audiences’ demands (demand viewpoint), if
we choose to reflect only one over the other, may have a limited manifestation of media
diversity for the following reasons. First of all, even if it is essential to provide various
programs (content diversity) ensured by pluralistic suppliers (source diversity) with
regulatory control, it is uncertain whether audiences will consume (audience diversity) all
the content provided. The effort to provide various programs would be meaningful only if
audiences watch them. According to Media Info Center (2006), after reaching the 50channel level, there is no significant increase in the number of viewed channels even if
the average of receivable channels is continually increasing. A similar law applies to the
expression of the audiences’ demands. When audiences’ demands are fully reflected in
media content, the content does not necessarily meet the standard of diversity
requirement because popular demand often relates to the mainstream rather than to the
mix of both mainstream and minority that is the tendency toward homogeneous rather
than heterogeneous demands. Since both supply and demand viewpoints have their own
important standpoints, choosing only one over the other would potentially limit the
19
assessment of the overall effects of media diversity. Figure 1 represents the summary of
supply and demand approaches.
Figure 2.1
Supply and Demand Approaches to Media Diversity
Diversity of supply
Media diverse supply of content (supply)
Diversity as assent
Heterogeneity of program types made
available by broadcasters
Measure ownership concentration, editorial
plurality, and content diversity
Diversity of Demand
Audience diverse demand for content
(consumption)
Diversity as received
Heterogeneity of program types audiences
view
Measure audience preferences
Heterogeneity of content, in general refers to the difference in terms of “one or
more specified characteristics” (Van Cuilenburg, 2000, p. 52) or “one or more relevant
dimensions” (Van der Wurff, 2004b, p. 216). For example, when media allow citizens to
have a wide range of choices in both format and content by providing different kinds of
programming, and the extent to which media provide different political orientations or
cultural traditions, then, the heterogeneity of content is expressed in media (see Croteau
& Hoynes, 2006; McQuail, 1993; Van Cuilienburg, 2000; Van der Wurff, 2004b). Since
both supply and demand viewpoints are equally important, yet opposite approaches to
media diversity, developing a new concept of media diversity, viewing supply and
demand viewpoints as inclusive rather than competing, can guide a better paradigm for
the adequate implementation of the policy. In fact, some current European scholars have
developed a new model that reflects this issue. For example, Van Cuilenburg suggested a
model that measures media market concentration applying both supply and demand sides
(D’Haenens et al., 2005). This conceptual model allows for not only an evaluation of the
20
effects of ownership concentration on editorial plurality (channel and title plurality) and
on media content diversity (program type and genre), but also an analysis of the degree of
content diversity reflecting both media supply and demand (D’Haenens et al., 2005).
Source, Content, and Audience Diversity: Political Approach
Similarly, Napoli (1997, 1999a, 1999b, & 2005) also provides a principle of
media diversity that is comprised of three major components, source (e.g., ownership of
outlet and content, and workforce), content (e.g., program or genre), and access diversity
(audiences’ consumptions or choices). His distinction between source diversity and
access diversity is analogous to the relationship between supply and demand viewpoints,
where source diversity reflects the supply viewpoint and access diversity reflects the
demand point of view. However, he takes a further interrogation on source diversity
(ownership diversity) with serious political implications and their impact on content
diversity. With this effort, he provides a critical role of the policy on source diversity, and
its implications in promoting content diversity, taking a further interrogation of the
political approach to media diversity. He also attempts to connect audience centrality to
the diversity issue, arguing that source diversity and audience access are integral parts of
media diversity closely related to the freedom of expression. Although his conceptual
framework proposing audience diversity as central to promoting media diversity is very
useful in media diversity studies, the relationship between content and audience diversity
hasn’t been empirically tested yet.
Napoli’s conceptualization of source diversity, particularly ownership of outlet
and content, is especially useful for examining the critical relationship between source
diversity and diversity policy as well as the effectiveness of the policy because his
21
specification of source diversity is based on the analysis of how policy makers have used
these characteristics to change media content. Hence, his further specifications of source
diversity can help to evaluate the effectiveness of the policy goals relevant to
broadcasting ownership rules; thus, it is certainly useful in providing a more
comprehensive theoretical paradigm for the adequate implementation of the policy on
media diversity.
In detail, source diversity in his diversity principle is characterized as ownership
diversity, and workforce diversity-- here I will detail ownership diversity, which is
closely related to my project. Ownership diversity contains subcomponents, content
ownership (related to programming production), and outlet ownership (related to
distribution). Although separation of content ownership from outlet ownership is
somewhat difficult since they often operate mutually inclusive, it is also true that there
are multiple levels within these two categories (Napoli, 1999a). For example, the
assessment of ownership diversity in cable television entails both the outlet ownership
and content ownership because the owners of cable systems are outlets (distribution
outlets) at the first level, yet the cable systems additionally carry individual cable
channels (content ownership) at the second level, which can produce content. Owners of
cable systems (outlets), in this way, can actively control sources of programming (content
ownership) that receives distribution. In other words, the availability of content
ownership (program ownership) is decided by the ownership outlet (the owner of the
distribution outlets). This explains why the FCC traditionally focuses on the final
distribution process as concerning source diversity (Napoli, 1999a). Similarly, in the
current broadcast television industry, ownership of distribution and production systems
22
are even more convoluted due to the increase of vertical integration, stimulated by the
deregulation climate during the 1980s and 1990s. Vertical integration allows television
networks (distributors) to control production; thus, they become programming producers
as well. Therefore, Napoli’s conceptualization on source diversity will be very useful in
examining such complex ownership structures of the broadcast television industry in
terms of the policy implications, and their effectiveness. In my study, source diversity
refers to ownership of both outlet and content.
Defining Media Content: Open and Reflective Diversity
While the investigation of supply (source of media supply) and demand (audience
preferences) viewpoint diversity relates to the attempt to find “influential indicators” of
media diversity, measuring content diversity is a “direct evaluation” of media diversity
resulting from particular goals of media. Therefore, achieving content diversity directly
refers to the ultimate goal of media diversity; that is, the heterogeneity of media content.
In other words, the approaches of supply and demand viewpoints concern how supply of
content or demand of content will determine media content while open and reflective
diversity are evaluative dimensions of media content. This means that the approaches of
supply and demand perspectives render themselves to the measurement of open and
reflective diversity on media content.
Open and reflective diversity measure the performance of media reflected on
media content in terms of whether the supply matches the types of demand. When
program types (media content) fairly match the economic norm (e.g., supply matches
population demand-bottom up approach), the degree of reflective diversity is high
whereas the program types follow communication norms (e.g., supply matches normative
23
values and minority beliefs, which media should be thought-provoking and objective),
then the degree of open diversity is high (see Van Cuilenburg, 2000; Van der Wurff,
2004a). When media content is defined by media’s expression of different ideas in the
same proportion with regard for audience preferences, then, media will be reflectively
diverse. Justification of reflective diversity stems from the emphasis on users’ media
choice, and their actual consumption of media because diversity of content supplied
would be meaningful only if audiences actually watch them. On the other hand, when
broadcasters attempt to provide various program types in equal proportions and offer the
access for reasonable ideas regardless of public support, then media content is openly
diverse (Van Cuilenburg, 2000).
Open diversity extends to the dimension that is a “balanced combination of
programs including specific proportions of cultural, educational, and informative
programs,” (Van der Wurff, 2004a, p. 139). The concern for applying open diversity in
measuring content is closely connected to the quality of programming that is essential to
the fabric of diversity concept. In the international research on media program, diversity
in programming (diversity as supply) is considered as a critical dimension of the concept
of quality programming (Hillve et al., 1997). Particularly, in European countries, public
service broadcasting contributes a major role in maintaining open diversity rather than
commercial broadcasting (Hellman & Sauri, 1994; Hillve et al., 1997; Williams, 1974).
Providing open diversity is lawfully required in European countries. Although the core
assumption has been made as stated above, Hellman and Sauri (1994) note that the
current studies on public service broadcasting have challenged the role of public
broadcasting in maintaining open diversity. The studies claim that the purpose of public
24
broadcasting has changed to entertaining, commercial, and even transnational which
resulted from increased competition. However, the opposite claim is also valid, proposing
that structures of public broadcasting in Western Europe are quite stable rather than
changeable; thus, they still largely sustain to provide open diversity against the tendency
toward the convergence between the public and commercial sectors. Van der Wurff’s
(2004a) study on this aspect substantiated the significance of public channels in
increasing the degree of open diversity. The current debates on the role of public
broadcasting are significant because they suggest the critical analysis of the impact of the
market force on media performing a public role of providing media diversity, and
whether to determine the need of increasing public broadcasting in promoting the quality
dimension of media diversity.
With the concern for emphasizing the complementary function of open and
reflective diversity, currently the industrial organization model (IO) has been employed
to produce an optimum balance between them (e.g., Van der Wurff, 2001). The core
assumption of this model is that media diversity will be best performed when open and
reflective diversity are well balanced in media content. Since the economic principle of
reflective diversity and critical principle of open diversity are respectively significant,
and have necessary goals in communication policy, open and reflective diversity
shouldn’t be competing (see Van Cuilenburg in D’Haenens, 2005; Van der Wurff, 2001).
Moreover, the industrial organization model is useful to analyze both the rationale of
media industrial actions, particularly in today’s complex media market environment, and
broadcasters’ adaptation of different strategies depending on their specific market
conditions.
25
The Impact of Market Forces on Diversity
Ownership and Content Distribution
Media diversity and policy mainly revolve around the market forces in the media
industry because a concentration of media ownership is often recognized as a potential
threat to democracy and accordingly in promoting media diversity (D’ Haenes et al.,
2005; Machesney, 1998; Van Cuilenburg, 2005; Van der Wurff & Van Cuilenburg, 2001,
etc.). The relationship between media policy on ownership concentration and media
diversity can be explained by the assumption of the political economy studies positing
that ownership support mechanisms (e.g., advertisement), and media polices are the
major influential factors for media behavior and content (McChesney, 1996). More
importantly, concentrated market structure grounded in the “market share” for media
seeking profit maximization can potentially hinder overall media diversity (Albarran,
2002; Gomery, 1993; Van Cuilenburg, 2000).
Napoli (1999a) further addresses the role of source in content distribution stating,
“ outlets are active programmers who may favor certain program owners over the
others…to a large degree the available diversity in program ownership rests with the
decisions made by the owners of the distribution outlet” (p.12). Many scholars (e.g.,
Bagdikian, Compaine, Nopoli, Sterling, etc.), indeed, have empirically assessed source
diversity addressing its central role in promoting media diversity. The emphasis of the
critical relationship between source and content diversity helps explain the justification of
media policy focusing on source diversity in promoting media diversity in order to
control the distribution of program content: that is the consideration of source diversity as
a major determinant factor, and being active in shaping types of content.
26
Competition and Concentration in Broadcasting Media
Media markets essentially have a penchant for a concentration due to media
seeking profit maximization. Following this assumption, many media scholars have
assessed competition and concentration in relation to media content to determine the
interrelationship between concentration (competition) and content diversity. The
proposed hypotheses of media diversity within the media market environment briefly
encompasses, first, more or less competition contributes to greater diversity (Litman,
1979; Van der Wurff & Van Cuilenburg, 2001), and second, market concentration either
reduces or increases diversity (Albarran & Mierzejewska, 2004; Dominick, & Pearce,
1976; Hellman & Soramak, 1985; Rothenbuhler & Dominick, 1982).
Since the 1980s, competition in the media market has been the area of focus for
regulation by European governments (Van der Wurff & Van Cuilenburg, 2000).
Competition for diversity, as two major divergent approaches to media diversity stated
earlier, involves “competition for diversity of supply,” and “competition for a diversity of
demands.” One party responding to the competition for diversity of demand (or
consumption) proposed that increasing competition would promote greater diversity
because media markets will efficiently respond to audiences’ demands. The other party
responding to the competition for diversity of supply argues that competition will result
in reduced quality, and duplication of content. Regardless of the opposing views, most
studies investigating the impact of competition on diversity have so far focused on
diversity of supply rather than diversity of demand (Van der Wurff, 2004b).
The competition for diversity of supply assumes that a fair degree of competition
between program suppliers is vital to ensure diverse content which audiences can choose
27
from. However, some increasing arguments concern a diminishing return of competition,
in which the goal is not to maximize the degree of competition, but to achieve an
optimum degree of competition. Not only the degree of competition is arguable, but also
achieving the optimum level of competition varies depending on specific market
conditions as well as types of broadcasters, such as public and commercial broadcasters
(see Blumler, 1991; Hellman, 2001; McQuial, 1992 for the argument on the strategies in
promoting media diversity, used differently in each of public service broadcasting, and
commercial based broadcasting). The contradictory outcomes of the previous research on
competition/concentration are mainly due to the complexity of market conditions that
pursue different strategies to attract audiences or to meet public interest standards. The
recognition of distinctive market conditions in relation to media diversity exemplifies the
need for developing a specific measurement suited to each different market condition.
The following research and its contradictory outcomes clearly reflect this concern.
Early studies on competition by Dominick and Pearce (1976) confirmed the
positive relation between competition and program diversity in television media,
concluding that market concentration reduces diversity. Similarly, Litman (1979) also
proved the positive relationship between competition, and diversity, in which increased
competition produced a greater level of both horizontal and vertical diversity. Horizontal
measures the number of types available across all stations in the market for specified
prime time throughout the week while vertical diversity measures the average number of
program types available during a day on a station (Litman, 1999). Consistent with the
outcomes of previous research, Lin (1995) has investigated program types of diversity
finding that increased competition from different program sources could result in
28
increased program type diversity. However, the positive relationship between
competition and diversity has been contested by several researchers whose outcomes
were contradictory to them. For example, Lacy (1987, 1988, & 1999) whose study
mainly focused on newspapers concluded that increased competition doesn’t necessarily
promote diversity. Correspondingly, scholarly attention has been given to the
incongruence of competitions effects on content diversity, addressing the following
concerns. First, the media market concentration grounded in the profit seeking
mechanism utilizes ruinous competition. Second, the optimum level of competition varies
in different market conditions as well as program types.
Media Nature as Profit Maximizing Mechanism
Responding to the first concern of media concentration grounded in its profit
seeking nature, Van Cuilenburg (2000) distinguished “moderate competition” and
“ruinous competition”, claiming that only moderate competition will achieve media
diversity. His later study (2001) and his current study with Van der Wurff (2004b)
examining Dutch broadcasting, reinforced his earlier claim. At this juncture, their
distinction between moderate and ruinous competition provides a critical way of
reassessing competition as a means of developing a sophisticated measurement of
competition. According to them, ruinous competition occurs when competition between
large numbers of channels becomes too intense, which causes broadcasters to seek low
cost strategies. Low cost strategies include broadcasters’ efforts to avoid risky, or
innovative content to target a niche market, while providing duplication of the program
that has already proven to be successful. Moderate competition, however, occurs when
competition is sufficient enough to encourage broadcasters to provide different channels
29
or programs, fueled by enough revenue to achieve this goal. Subsequently, increased
channels produce a high degree of program distinctiveness while reducing duplication of
programs (Van der Wurff, 2004a). Their studies also addressed the significance of the
impact of market forces in the media industry in assessing media diversity because they
identified the profit driven nature of the media industry as a forceful factor in creating
excessive (ruinous) competition, which in turn decreases media diversity by producing a
sameness of media content (producing homogeneity rather than heterogeneity). In other
words, the primary reason that increased competition does not always guarantee media
diversity is due to the market penchant for seeking profits grounded in cost strategies
rather than public interests. In this way, media competition relies not on content but on
the price, producing content mainly for popular demands rather than producing diverse
and substantial content for both mainstream and minorities.
In an effort to explain the influence of media profit seeking mechanism on market
concentration, media scholars have investigated the structure of the media market that
caters to the mass market. The concern for mass markets is closely related to media’s
reliance on advertising, targeting mass audiences where producers often accommodate
advertiser-desirable audiences, and accordingly limit the diversity of programs (see
Einstein, 2004c; Grant, 1994). Media’s turning to a low cost strategy can be explained by
the economic model that has been used to analyze diversity in the media market place for
almost 30 years (Dominick & Pearce, 1976; Litman, 1979; Van der Wurff & Van
Cuilenburg, 2001). Because of this economic model (new entrants with lowest cost
strategies) that explains the logic of the advertising support mechanism, television
30
produces a need to create programming that works within limited guidelines catering to
mass audiences (Herskovitz, 1997, quoted in Einstein, 2004c).
According to Grant (1994), all advertiser-supported media outlets attempt to
maximize the size of targeting audiences for increasing profits from the advertising
revenue. Van der Wurff (2004b) also notes that the studies of U.S broadcasting networks
(e.g., Collette & Litman, 1997; Thomas & Litman, 1991) show that networks often enter
the market with cheap and popular programs, even if competition was very low in the
market due to their intention of controlling market share while their advertising revenue
is still limited. This tendency is also apparent in Europe where new channels aim to build
up programs with little investment; thus, cheap programs are desirable in offering a good
price to audience ratio (Van der Wurff, 2004b). With a similar concern, Einstein (2004c)
examined diversity of broadcast network programs in prime time in relation to the
changing advertising marketplace and its effect on media diversity. Her finding indicates
that there is a negative correlation between diversity and advertiser dependence,
substantiating that advertising reliance contributes to a decline in diversity. The reason is
that the changing economic environment with the increase of vertically integrated
corporations, facilitates media to compete for advertising dollars, and their response to
demanding shareholders eventually influences programming content. Her finding
substantiates the general decline of media diversity over years, anticipating that the
changing economic environment will continually result in the decline of diversity.
Different Strategies of Public and Commercial Broadcasters
Responding to the second concern of competition and concentration strategies,
Van der Wurff (2004b) provides the characteristics of different types of broadcasters and
31
media market conditions that stimulate different strategic objectives (D”Haenens et al.,
2005). For example, public broadcasters often aim to provide for public interests more
than profit maximizing broadcasters; as a result, public channels are expected to be more
diverse with a bias towards high quality, elitist programming as opposed to commercial
channels (see Brown, 1996; Souchon, 1994; Van der Wurff, 2004b). In this way, the
presence of public broadcasters with their moral obligations to serve public interest may
function to prevent the ruinous competition resulting from excessive competition for
advertising revenue, which in turn can prevent a decline of diversity in the broadcasting
industry. Gant’s (1994) study also relates to the significance of the presence of public
broadcasters concerning quality programming. Grant’s finding substantiates that public
television has more vertical diversity than commercial broadcast television networks.
Although the studies have contended the important role of public broadcasters in
terms of quality diverse programming (i.e., open diversity providing balanced
combination of programs including specific proportions of cultural, educational, and
informative programs), there are two conceivable obstacles to the proposition that the
presence of public broadcasters can be an ultimate solution for diversity. In an economic
perspective, increasing minority interests provided by public channels based on the logic
of choice model will result in less attractive programming than similar minority programs
provided by commercial channels (van der Wurff, 2004b). Therefore, public
broadcasters’ promoting diversity does not necessarily increase the number of public
channels or competition unless some specified regulation on content is required. Second,
as Levin’s (1971) collected data indicated, public television has changed since 1969 in its
classification, from educational to public television, which might be a sign of essential
32
change in the diversity of programming offered on public television (Grant, 1994). So far,
not many scholars have researched public broadcasting and their changes in order to
determine their quality programming in terms of diversity. Therefore, the need for the
presence of public broadcasters in ensuring the quality dimension of media diversity
should take into consideration the potential obstacles noted above, and be studied with
other possible factors playing a role in media diversity.
Regulation on Concentration
Although the terms “competition” and “concentration” are often interpreted as
simple opposing concepts and used inclusively within source diversity studies, the focus
areas differ in that competition refers to pluralistic channels (number of outlet or firms)
while concentration involves the ownership that controls competition (size of firms or
market power) (Compaine, 2000). Competition in media diversity is concerned with
whether multiple channels satisfy the demands of audiences and is also often studied as
competition among channels or programs. On the other hand, concentration is concerned
with whether ownership of content and pluralistic channels produce tactics for
broadcasters to inclusively expand audiences of both the mainstream and minorities, with
a careful selection of programs (D’Haenens et al., 2005). Today, many diversity concerns
are centered on media consolidation (or media monopolies) and their effects on content
diversity. In spite of various views on the impact of concentration on media performance,
in general concentration of ownership is considered to be a detrimental factor to media
democracy (Albarran, 2002; D’Haenens et al., 2005; McChesney, 1998). However, many
scholars have indicated that media markets were more concentrated in the late 1990s.
Several major identified factors for the increased concentration include technological
33
change and liberalization of regulatory policy (Albarran & Mierzejewska, 2004), which
need to be critically investigated.
Types of consolidation patterns are characterized as horizontal and vertical
integrations. Briefly, horizontal integration refers to a single firm owning multiple
entries, yet the integrated firm doesn’t necessarily control different stages of media
production. On the other hand, the vertically integrated firm refers to a single firm
owning different stages of the production and distribution; therefore, it allows a firm to
control these different levels of the production and distribution (Compaine, 2000). This
implies that the potential control of media, if concentrated, may deny entry-level access
of new independent media firms, using integration as a strategic practice for obtaining a
monopoly power.
Most large mergers of the 1990s are characterized as vertical integration including
the mergers of Disney with Capital Cities/ABC, which have been major foci to be
debated (Compaine, 2000). Traditionally, many media concentration studies and
regulation policies have often been focused on horizontal integration rather than vertical
integration (Compaine, 2000; Napoli, 1999), which is assessing the number of
broadcasting outlets owned by one single firm. However, as emphasized above, the
ownership pattern has changed to vertical integration that has the potential of controlling
content distribution. A critical inquiry relates to whether it is necessary to change the
direction of the diversity study to the concentration issue, questioning the effectiveness of
existing laws that account for “the number of outlets” rather than “size of multiple
ownership operators.” Responding to this concern, several scholars mainly within the
34
U.S. have focused on market shares, and advertising revenue in order to examine the
market power (e.g., Albarran; Campaine, etc.).
Other political economy scholars have been concerned about the impact of the
deregulation policy on media ownership that allows the vertical integration of media,
which in turn results in a concentration of ownership (e.g., Croteau & Hoynes, 2006;
McChesney, 1997; Compaine & Gomery, 2000; Einstein, 2004, etc). Taking the critics’
general contention, the current market concentration in the media industry is, in fact, a
direct corollary of the deregulation policy during the 1980s, and stimulated by the
Telecommunications Act of 1996. Drushel (1998) and Howard (1998) have substantiated
an increased level of concentration after the Telecommunication Act of 1996. The core
assumption of the deregulation policy is on the basis that it should offer an equal
opportunity to all media firms to help their entry into the market. The goal of encouraging
competition among industries is rooted in the economic principle, and most importantly,
is to promote the diversity of voices with regard to broadcast ownership (see Bates, 1998;
Chon, Choi, Barnett, Danowski, & Joo, 2003; Einstein, 2004). Nevertheless, as the
current media market proves, it increased opportunities for more industries to mitigate the
monopolistic practices, and inversely stimulated conditions for mounting consolidation
across media industries in their strive to maximize profits. The failure of source diversity
after implementing the telecommunication act of 1996 proves the reverse effect of the
market place idea. The problem lies within the uncounted “structural inequality” in the
media market that does not rely on numbers of outlets, but on a “concentrated ownership
power” proscribing effective competition to new entrants. This structural inequality of
media ownership generates certain privileges to the dominant media, which negatively
35
influences overall media diversity. The ineffectiveness of the policy that resulted in
inverse effects against its intention (increasing competition as to reduce monopolistic
practice) illustrates the need for an investigation on the critical impact of media policy on
market concentration in order to implement an adequate policy in promoting media
diversity.
Policy Effectiveness
While much of the scholarly attention is paid to the critical relationship between
source and content diversity for an adequate implementation of the policy on media
diversity, there is also a view that directly concerns content diversity. This view mainly
stems from the mistrust of the effectiveness of policy on source diversity to change
content. The policy focusing on source diversity to increase competition is ineffective
because the changing market structure that heavily relies on advertising will not promise
diversity of content (see the section on Competition and Concentration above). Thus, it
suggests that regulatory policy directly controlling media content rather than content
providers should be an ultimate goal to achieve diversity. Einstein (2004a & 2004b), for
example, points out that content diversity is an underlining goal, with an examination of
the ineffectiveness of certain polices that inversely resulted in a decline of diversity.
Einstein (2004b) examined program genre (content diversity) during 1969-1973, and
1989-2002 in order to evaluate the effectiveness of the syndication rules (fin-syn rules)
combined with PTAR (Prim Time Access Rule), the rules employed to break up the
dominance of broadcasting networks. In her study, Einstein (2004b) indicates the
possibility of syndication rules contributing to a decline in diversity.
36
Similarly, Napoli (1999a) highlights the policy objective on media diversity,
examining ineffectiveness of regulatory polices on concentration. However, his analysis
on policy provides the diversity principle that is broken into three critical components
(source, content and exposure diversity) to make theoretical justification of the diversity
policy more clear. In aligning with the FCC’s jurisdiction, his intention is to establish an
analytical framework for future diversity research. According to him, the reason for the
ineffectiveness of policy is due to insufficient development of the diversity principle, in
which the policy often fails to demonstrate the critical relation between source and
content diversity. The policy’s focus on source diversity to change content is mostly
concerned with the number of outlets rather than market inequality that directly addresses
audience exposure (or consumption). Therefore, the policy goal is not sufficient enough
to measure all other indicators that influence media diversity (or content diversity). For
that reason, he suggests that the policy goal must entail continual monitoring of content
diversity with a close investigation of all other diversity components to evaluate the
effectiveness of the diversity policy. The FCC’s lack of interest in monitoring the policy
effects on content diversity, thus, can be one major attribution to the ineffectiveness of
the diversity policy (Napoli, 1999a).
Highlighting the Foci of Media Diversity Studies
In sum, many of the previous studies on media diversity have pointed out
conceptual problems of media diversity, and defining diversity of content is not agreeable
due to divergent approaches to diversity. With the scholars’ earnest attempt to develop
the dimension of media diversity, so far, supply and demand viewpoints were developed
with an economic approach. In this way, diversity should be achieved when supply
37
matches demand. However, achieving the diversity goal with supply and demand
viewpoints depends on discrete approaches to defining media content. When content
diversity is defined by normative values, or communicative norms (open diversity),
diversity should be assessed by whether the supplier provides quality content that meets
such criteria. However, when content is defined by audiences’ demands or preferences,
then diversity should be assessed by whether content reflects audiences’ popular
expression. Other scholars also developed a dimension of media diversity that consists of
source, content, and audience diversity, claiming source and audience diversity are
integral parts that determine content diversity. Both supply and demand viewpoints, and
source, content, and audience diversity are similar in that the assessment of media
diversity must include the influential indicators of both media supply, and audience
demand in terms of content diversity. However, many of the studies so far have focused
on the supply viewpoint (the relationship between source and content diversity) in terms
of media diversity. This means that diversity assessment has been limited to a partial
dimension of media diversity excluding audiences’ demands and their choices. Thus, a
more inclusive assessment on media diversity should be used for developing a
comprehensive view of media diversity.
Against the grappling task of defining media diversity, one consensus that has
been made by media diversity studies was the impact of market forces on diversity. Both
diversity studies and policy are mainly centered on market forces in the media industry,
and how this market force will influence media performance of promoting diversity.
Concentrated market structure, motivated from profit maximizing goal and advertisersupported mechanism, has been one of the major foci to explicate its hindrance to media
38
diversity. The critical relationship between source diversity and content diversity, in this
way, has been studied by numerous media scholars. However, the study outcomes
explaining the relationships between competition/concentration and content diversity
were contradictory, which further confuses the future research foci on media diversity as
well as policy making. As the previous studies prove (provided throughout this chapter),
not only does increased competition not always guarantee diverse content, but also the
concentration of ownership and outlets doesn’t always hinder media diversity.
Responding to these contradictory outcomes, scholars’ using the application of
the economic model attempts to delineate what causes such contradictory outcomes. One
conceivable attempt is distinguishing ruinous competition and moderate competition
claiming that only moderate competition can promise diversity. Such a distinction
explains the hyper-commercialized media market that tends to compete for advertising
revenue rather than competing for content. In this perspective, the presence of public
broadcasters who have a moral responsibility to serve public interest might be a solution
to prevent ruinous competition as well as ensure quality content. Such an assumption
provides justification for the need to investigate specific market conditions where
different programming strategies are used. Chapter 5 dealt with this issue, examining
media diversity in each of the public and commercial broadcast television industries with
the application of multiple measurements necessary for assessing various dimensions of
media diversity.
The previous studies on media diversity have also paid attention to the regulatory
policies on concentration and their effectiveness as to whether they reflect the changing
media environment, and accordingly, changing pattern of ownership. The increase of
39
consolidation in media markets, in this way, becomes a heated issue in terms of media
diversity. The rapid increases of integration both horizontally and vertically after the
telecommunication act of 1996 has created a great concern as to whether such a change
will influence media diversity. In spite of its significance of investigating changing
ownership concentration from horizontal to vertical integration and its effect on media
content, it is difficult to measure vertical integration. Consequently, the policy on media
diversity has been focusing on horizontal integration in its implementation (e.g.,
restrictions on the number of broadcasting stations under a single owner).
Finally, the issue regarding concentration of media market lends itself to the need
of close investigation of not only competition between outlets that provide sufficient
numbers of outlets, but also structural inequality (or monopolistic power) in terms of
source diversity. The studies of structural inequality explain commercialized media
behaviors that tend to compete for advertising revenue rather than competing for content,
which may cause a decline in diversity. These studies show the need for investigating a
more complex dimension of source diversity while the diversity polices should take into
consideration policy effectiveness on content diversity. Some other studies even take
further steps, suggesting direct control over content diversity due to the ineffectiveness of
regulatory policies on source diversity. Since diversity polices focusing on increasing
competition to enhance content diversity don’t guarantee what they promised due to
ruinous competition, controlling content to promote diversity might be the ultimate
solution. However, this suggestion directly conflicts with the First Amendment. The
justification of the censorship on media content, in this way, must be thoroughly
reviewed, interpreted, and examined as a means of establishing consistent public interest
40
standards or diversity criteria. Chapter 4 dealt with the First Amendment tradition in
relation to media diversity, and examined the effectiveness of diversity policies on source
diversity in order to provide a comprehensive understanding of the public interest criteria,
needed for investigating the critical relationship between media policy and source
diversity.
41
CHAPTER 3
THEORETICAL AND METHODOLOGICAL FRAMEWORKS
Theoretical Foundation
Social and Economic Theories
The theoretical foundation that informs this study is drawn from two major
traditions of media study, social and economic theories, to elicit the fundamental
relationship between media policy and economy, which in turn shape the dimension of
media diversity. The social theory validates a norm to be applied in a particular national
media system; thus, it manifests the critical relationship between media and society. The
proposed framework of the social theory provides “the normative principles” for a media
system and its behaviors due to the presumption that media are expected to serve the
general benefit of society, particularly political and social/cultural goals over their
professed organizational goals (McQuail, 1994). Therefore, media performance in
promoting diversity should be measured in terms of whether media facilitate independent
thoughts, diversity, information quality, and the social/cultural order in society.
On the other hand, economic theory justifies the economic goals of media and
their industry actions. The core principle of the economic theory centers on the notion of
a “free market” in which “the media are conceptualized as primary competitors in this
marketplace” (Croteau & Hoynes, 2006, p.16). Since most media firms are commercial
entities, the economic theory claims that the primary function of a media corporation is to
create profits for owners and shareholders; thus, the success of media should be assessed
by profit maximization. For that reason, advertising revenue and profits become core
measurements. It concerns the advantages of economic efficiency in which media
42
responsiveness to an individual consumer is for their profit-seeking goal, while
promoting efficiency, and innovation.
Both theories, however, have their own limitations for the practical implication of
media diversity. The perfect implication of the social theory, to assess media diversity
and policymaking, involves some cautions. Media diversity principles stem not from a
single, but multiple accounts grounded in various constitutive cultural/social, and
historical context. In this way, the oversimplified normative standard applied to the
assessment of media diversity and the policy might not be a satisfactory solution for
promoting media diversity. The economic theory, on the other hand, can potentially
dismiss the cultural/social, and political significance of media (Croteau & Hoynes, 2006).
Media differs from other business entities in the way of its “commodity.” The product of
media is information, or ideas that can potentially shape social/cultural and political
values, beliefs, and attitudes, and accordingly democratic decisions of citizens in society.
Therefore, both a disagreement and common consensus of the standard of social and
economic theories in terms of media diversity should be abridged and highlighted to
provide a starting point for the issue of media diversity. Although, this project is mainly
guided by a sociological paradigm in defining the concept of diversity, it also concerns
economic theory because economic theory can help understand media industrial actions,
and market behaviors in which most current debated issues of media diversity are
grounded. Hence, an analysis of the rationale of the media industry action, rooted in a
profit seeking nature, is essential to this project in investigating the impact of market
concentration on media diversity.
43
Theoretical foundation of Open and Reflective Diversity
The theoretical conceptual framework of open diversity fairly reflects the social
theory because it matches the core assumption of the social theory. Open diversity
assumes that media have considerable influence on society and people’s opinions, and
accordingly the formulation of public opinions; thus, media content should express
diverse opinions in an equal manner to ensure unbiased public opinions, such as political,
cultural, and other societal interests (Cuilenburg, 1999). Along with the core assumption
of medias influence on people’s preferences, the dimension of open diversity is defined
by the following characteristics: Normative approach to diversity (top down approach),
qualitative diversity assessment, and focusing on cognitive content dimensions that do not
necessarily account for actual media use. In other words, it attempts to ensure that no
preferences in the population attain broader media coverage than any other preferences;
thus, equal access for ideas to society’s communication system is an ultimate goal
(Cuilenburg, 1999). In this effort, media diversity is often conceptualized within the
realm of media policy, focusing on “how media supply will provide diverse content” that
are desirable for societal, cultural, and political needs, and ensuring that the content meets
theses goals of open diversity.
On the contrary, reflective diversity basically reflects the economic theory that
supply should match audience demands. In reflective diversity, media’s seeking profits is
justified because their industrial action of seeking profit will eventually satisfy audience
demands, and consequently will promote media diversity by fairly reflecting the
population’s opinions and interests. This model assumes that population preferences
influence media, and diversity of program types in media content is demanded by
44
audiences’ preferences. With this assumption, the dimensions of reflective diversity entail
the empirical approach (bottom up approach), quantitative diversity assessment, and
focus on expressive content dimensions. In other words, reflective diversity defines
media content as media to express population preference contributing to media content
that lies within the realm of audiences’ actual use of media. Therefore, the ultimate goal
is to provide equal access for people or consumers. More importantly, this model
explains the media market behavior targeting popular demands, and the significance of
popular expressions influencing media content, over elitism that concerns minority
beliefs, attitudes and conditions necessary for critical functions of media performance
(Cuilenburg, 1999). See Figure 3.1 for dimensions of open and reflective media diversity.
Figure. 3.1
Dimensions of Media Diversity
Open diversity:
Top down approach
Assumes media’s influence on people’s
preference
Normative approach to diversity
Reflective diversity:
Bottom up approach
Assumes people’s preferences influence
media diversity
Empirical approach to diversity
Qualitative diversity assessment
Quantitative diversity assessment
Focus on cognitive content dimension
reflecting rationality
Access of ideas for different content
Focus on expressive content dimension
reflecting popular demands
Access for people
Source. Modified from reflective diversity vs. open diversity (Cuilenburg, 2000)
Theses two major theoretical paradigms utilize a different assessment of media
content, depending on what the national media policy emphasizes. If the media policy
emphasizes the expressive function of media, then diversity can be assessed in terms of
the reflective dimensions of media diversity. On the other hand, if the media policy
45
stresses the critical political function of media role, then it requires a diversity assessment
in terms of the cognitive quality dimensions of media content; that is the dimension of
open diversity. This substantiates the critical relationship between media policy and the
assessment of media diversity, in which the assessment varies depending on a distinctive
political emphasis. Moreover, a sole approach of either open or reflective diversity might
have its own limit, and may even be potentially detrimental rather than beneficial for the
following reasons: 1) Perfect openness (maximum open diversity or maximum openness
on media content offered by suppliers following open diversity criteria) may harm
majority opinions in favor of minority beliefs, 2) the perfect reflection of popular
demands (maximum reflective diversity or maximum reflection of audience demands on
media content) may harm a great variety of social positions and opinions (see Van
Cuilenburg, 1999 & 2000). The assumption that media perform best when these two
perspectives are balanced further justifies the methodological approach of my project
including both supply and demand points of view in assessing media diversity.
The Public Sphere Model and Market Model
The public sphere model originally developed by Jürgen Habermas also fairly
reflects the core assumption of the social theory, and is useful in conceptualizing public
interest criteria, such as media diversity. Habermas (1991) distinguishes “public sphere”
from “private realm,” and “sphere of public authority” in which the private realm refers
to civil society (e.g., community exchange), the sphere of public authority as to state
(e.g., political realm), and public sphere as to intersected sphere of political realm (state),
world of letters (media press), and market of culture (civil society). The public sphere in
the political realm, evolved from the public sphere in the media press, and through the
46
medium of public opinion, it puts “the state in touch with the societal needs.” More
importantly, the public sphere functions on a critical argument, based on rationality
where citizens’ critical debate on politics can be transformed to social integration with
state power and market economies.
According to Croteau and Honynes’ (2006) brief summary of the public sphere
model in relation to media performance, the model assumes that media are public
resources serving public interest rather than just a profit seeking mechanism of large
conglomerates; therefore, media should promote active citizenship via information,
education, and social integration. Within the assumption, audiences are conceptualized as
“citizens” rather than “consumers.” More importantly, the model suggests that the role of
media diversity is central to media duties of representing the diverse range of public
views. Finally, it views regulation as a useful tool in protecting public interest (Drale,
2004; Croteau & Hoynes, 2006); thus, it justifies state intervention when media industry
action harms public interest. The core assumption of the public sphere model, in deed,
can provide an underpinning of establishing consistent public interest standards, thus can
guide policy objectives in terms of media diversity.
On the other hand, the market model conceptualizes media as private companies
that sell products; thus, information produced by media is considered to be a commodity.
This means that media audiences are viewed as consumers rather than citizens, and are
encouraged to consume the media products. This model also justifies the media industry
generating profits for owners and stockholders because the primary purpose of the media
is to maximize profits. The market model conceptualizes public interest as whatever is
popular where the role of diversity is viewed as an industrial strategy for reaching new
47
niche markets (Croteau & Hoynes, 2006). In other words, the market model assumes that
media’s satisfying popular demands for a profit seeking mechanism will consequently
generate media diversity. In this respect, the market model is closely linked to the
reflective dimension of media diversity, and provides the justification of the media
market seeking profits as promoting media diversity (see Figure 3.2 for core assumptions
of public and market models).
Figure 3. 2
Assumptions of the Public Sphere and Market Models
Public Sphere Model
The role of diversity and
innovation
Central role of media
Providing diverse range of
public views and tests
Innovation as key factor for
citizens
Purpose of media
Definition of audiences
Concept of public interest
Perception of regulation
Accountability
Measurement of success
Promoting active citizenship
via information, education,
and social integration
Citizens
Diverse, substantive, and
innovative content, not
necessarily always popular
Useful tool to protect the
public interest
The public, and the public
interest
Serving public interest
Market Model
A strategy for reaching new
niche markets
Innovation as a threat to
profit standardized
mechanism; and as a key
factor for attracting
audience attention,
satisfying needs
Producing profit for media
firm owners and
stockholders
Consumers
Popular demands
Interference to market
processes
Owners and stockholders
Maximizing profit
Source. Modified from summery of media models (Croteau & Hoynes, 2006)
My project inclusively reflects open and reflective theoretical paradigms,
particularly for the assessment of media diversity in commercial broadcast television. An
48
examination of the commercial media industry requires an approach of the market model
mainly because their primarily strategies for content programming are heavily influenced
by audience demands, directly to the primary goal of profit maximization. In this effort,
open and reflective diversity can help assess media industry actions in promoting media
diversity in a more comprehensive way. At the same time, the public sphere model guides
the conceptualization of media diversity, directing it to the particular philosophical
underpinnings of a social function of media in serving public interest, while the market
model helps analyze the U.S. broadcasting market behavior in terms of market
competition/concentration and media policy within the current market environment.
Figure 3.3 explains overall relationship among diversity paradigms, and policy goal.
Figure 3.3
The Relationship among Diversity, Policy, and Two Conceptual Paradigms
Open Diversity
Reflective Diversity
(Top down approach)
(Bottom up approach)
•
•
•
•
Media’s influence on
people’s preference
Content reflecting
reasoned values
Access of ideas for
different content
•
•
People’s preferences
influencing media
diversity
Content reflecting
popular demands
Access for people
Media Diversity
Regulation
(Public interests)
Policy
demanding
critical political
role of media
The Public Sphere
Model
Promoting active
citizenry
Societal
needs
Individual
needs
Policy
demanding
expressive
role of media
The Market Model
Promoting
consumption power
Deregulation
49
Proposed Theoretical Framework:
Developing a Multi-measure of Media Diversity
Program Choice and Public Policy Model: Assessment of Content from Supply and
Demand Viewpoints
The program choice model, mainly developed within the field of economics (e.g.,
Noll et al., 1973; Own et al., 1974; Steiner, 1952; Wiles, 1963), often concerns reflective
diversity, which rationalizes commercial media structures attempting to maximize
audience preferences. Hence, media content is defined largely by audience choices. The
program choice model posits that the diversity of supply can be achieved when programs
supported by advertiser-supported broadcasting markets are increased (see Bae, 2000; De
Jong & Bates, 1991; Hillve et al., 1997; Van der Wurff, 2004a). The rationale behind the
assumption is that audience distribution is equal over similar channels; therefore, the
overall increase of mainstream programs permits the condition for decreased audiences
on a per program basis due to sharing the same audience distribution. This condition
subsequently stimulates broadcasters to specialize programs with a strategy aimed at
targeting niche markets to attract minorities instead of duplicating mainstream programs
(D’Haenens et al., 2005). More importantly, this model justifies media industrial action,
investigating viewer behaviors in determining program types for maximizing profits with
the proposition that goods (or products) are freely exchanged between viewer preferences
and media content. Hence, the program types should be evaluated on the basis of viewer
preferences of program choices.
Although the program choice model expects media diversity with the assumption
that increased numbers of channels will result in differentiating channels for the demand
50
of niche programs, some scholars (e.g., Picard, 2001; Van der Wurff, 2004a, etc.) provide
an alternative perspective. Because the overall size of audiences is not necessarily altered,
increased channels will result in the decline of the average audience size per program.
Subsequently, the decline of the audience size per program reduces advertising revenues
per program (Picard, 2001), which motivates commercial broadcasters to duplicate
programs for cost effective strategies. Hence, the diversity in media content decreases in
return. The program choice model is important to understand media performance in
promoting diversity grounded in the economic principle, especially for today’s media
market which is subjected to market forces.
The public policy model reflecting open diversity has guided European public
service broadcasters. The public policy model assumes diversity to be a normative
standard of quality. It suggests that the policy goals of aiming for pluralism allows equal
access to the multiple sectors of society to serve the diverse audience types, and provides
a wide range of choices in program content (Blumler, 1991; Hellman, 2001; McQuial,
1992). The public policy model argues that the hyper commercialized broadcasting
market reduces the quality of programming. The lowest cost competitive strategy
addressed by Van der Wurff (2004b) manifests such a notion concerning the need of
increasing public broadcasters to provide open diversity. Van der Wurff (2004b) notes
that the lowest cost strategies of media firms stimulate excessive competition for
advertising and views markets rather than content competition, thus, it eventually
contributes to the decline of media diversity. When increased channels reduce revenues,
and financing differentiation of programs is difficult to maintain, new entries lead to
ruinous competition. Therefore, it assumes that the obligation of the public broadcasters
51
to offer informative and educational programs with quality content (e.g., offering high
open diversity) can prevent a decline of diversity caused by ruinous competition among
commercial broadcasters (Brown, 1996; Van der Wurff, 2004b).
Structure Conduct Performance Model: Assessment of the Relationship Between Source
and Content Diversity
The industrial organization model (IO) developed within the economic field,
basically explains a causal relationship between market structure, conduct, and
performance. The characteristics of market structures include market concentration,
product differentiation, and barriers to entry that directly influence the conduct of firms.
The conducts are “pricing behavior,” “product and advertising strategies,” and “research
and development,” which in turn shape the overall performance of a firm. The main
characteristics of performance include productive efficiency (output is produced at
minimal total cost), equity of fairness (income distribution effects whether producers
prosper at the expense of consumers), cultural (media are cultural industries), and
diversity views (democratic function of media) (Hoskins, McFayden, & Finn, 2004). The
study of market forces on media diversity has adopted this theory as a basic template to
the analysis of media markets in terms of media diversity.
The usefulness of IO in analyzing media industrial action in terms of media
diversity is exemplified by McQuail’s (1982) introduction of the Structure Conduct
Performance model (SCP); Cuilenburg’s (2000) use of SCP for developing the concept of
media competition; Hopkins et al. (2004) proposing the Theory of the Firm; and Wurff’s
(20004b) application of the IO in measuring competition in broadcasting. In building a
theory relevant to media diversity, the structure conduct performance model (SCP) can
52
provide a major theoretical guidance for the project, which takes the primary assumption
that “market structure” (competition and concentration) is a major determinant to
“product strategies” (conduct), and consequently of “media diversity” (performance).
According to this model, competition has both structural and behavioral dimensions
found in media markets. The major variables of marketing strategies are product,
distribution, promotion, and price, which are often blended to satisfy the targeted
consumers (Cuilenburg, 2000). The theory of firm (Hopkins, et al., 2004), also grounded
in IO, distinguishes major market structures, which delineate types of competition that
are perfect competition, monopolistic competition, oligopoly, and monopoly (see Figure
3.4 for the major market structure and product differentiation).
Figure 3.4
Market Structure Proposed by the Theory of the Firm
Market structure
Number of suppliers
Product
Barrier to entry
Perfect
competition
Monopolistic
competition
Oligopoly
Many
Homogeneous
No
Many
Heterogeneous
No
Few
Yes
Monopoly
One
Usually
heterogeneous
Not applicable
Yes
Source. Modified from the theory of the firm (Hoskins, McFayden & Finn, 2004)
In brief, perfect competition occurs when there are many numbers of firms and products
are identical; monopolistic competition occurs when there are many numbers of firms and
products are differentiated; oligopoly competition occurs when there are few numbers of
firms and products are usually differentiated; and monopoly occurs when only one firm
53
controls the industry, and product differentiation is not applicable. Based on this theory,
perfect competition produces homogenous products whereas monopolistic competition
produces heterogeneous products. The structures of both perfect competition and
monopolistic competition, however, are not considered as barriers to entry because in
these structures, competition occurs among “many numbers of firms.” On the other hand,
oligopoly and monopoly become barriers to entry due to a lack of competition between
firms resulting in dominance of either a few or a single firm (size of firms). More
importantly, it assumes that the oligopoly structure usually differentiates products while
the monopoly is not applicable to determine types of products produced. Put differently,
this assumption doesn’t consider oligopoly and monopoly as hindrances to media
diversity (differentiation of the products) as opposed to the classical economic theory that
assumes oligopoly and monopoly as a major hindrance to media diversity.
Scherer (1996) following SCP provided different characteristics of product
strategies produced by oligopoly and monopoly structures. Scherer’s typology of market
structure differs from the assumption of the theory of the firm in that the types of market
structures are further categorized into six different market structures including,
monopoly, multi product monopoly, homogeneous oligopoly, differentiated oligopoly,
full (perfect) competition, and monopolistic competition (see Figure 3.5 for the typology
of market structure). As Figure 3.5 shows, in this model, monopoly and multi product
monopoly are characterized when there is one supplier. However, monopoly generates
homogeneous products while multi product monopoly produces heterogeneous products;
homogenous oligopoly, and differentiated oligopoly are characterized as the competition
between few large suppliers.
54
Figure 3.5
Typology of Market Structure
Market structure
Number of suppliers
Product
Barrier to entry
Perfect (full)
competition
Monopolistic
competition
Homogeneous
oligopoly
Differentiated
oligopoly
Monopoly
Many small
Homogeneous
NA
Many small
Heterogeneous
NA
Few large
Homogeneous
NA
Few large
Heterogeneous
NA
One
Homogeneous
NA
Multi-product
monopoly
One
Heterogeneous
NA
Source. Modified from typology of market structure (Scherer, 1996)
NA: Not Applicable
However, homogenous oligopoly produces homogeneous products whereas a
differentiated oligopoly facilitates heterogeneous products; full (perfect) competition and
monopolistic competitions occur where there are many small suppliers, but full
competition generates homogeneous products whereas monopolistic competition
generates heterogeneous products. According to Scherer, monopoly, homogeneous
oligopoly, and full (perfect) competition produce homogeneous products while multi
product monopoly, differentiated from oligopoly and monopolistic competition produce
heterogeneous products.
Although both the theory of firm and Scherer’s typology of market structure are
on the basis of IO, Scherer’s market structure is more useful for analyzing competition
(concentration) and media diversity for the following reason. This structural model
challenges the general assumption that all oligopoly structure hinders product
differentiation. As some researchers proved (e.g., Van Cuilenburg) oligopoly under some
55
conditions actually facilitates product differentiation (diversity) if the competition is in
moderation, and is based on “content” rather than “price” (see, the section on Media
Nature as Profit Maximizing Mechanism in Chapter 2 for a detailed explanation of the
distinction between moderate and ruinous competition). Inversely interpreting, not all full
competitions facilitate product differentiation; if the competition is too excessive, and is
based on price, full competition actually produces the sameness of the product
(homogenous media content) while only monopolistic competition satisfies the condition
for product differentiation. Scherer’s further specification of monopoly, oligopoly, and
full competition, in fact, explains different product strategies even within the same
categories of both oligopoly, and monopoly market structure. The assumption of different
products (either homogeneous or heterogeneous products) produced by an oligopoly is
useful to understand the contradictory outcomes of the previous research finding, which
increased competition does not always guarantee diversity of media content. The further
specification of oligopoly that requires different strategies will certainly justify my
research question of different market conditions in the U.S. broadcasting market that is
characterized as oligopoly competition.
Public Sphere Model: Assessment of the Quality Dimension of Media Diversity and
Policies
The social theory has historically evidenced its effectiveness when it concerns
both quality and pluralism in the field of broadcasting media (Cavallin, 2000). Although
diversity is conceptualized differently in the public sphere and market model
respectively, the public sphere model principle, with its proposition of media providing
public goods, can adequately manifest the concept of diversity and accordingly of the
56
policy implementation. Since media diversity reflects the quality performance of media
that serves public interest (see Hillve at al., 1997; McQuail, 1992), the public sphere
model grounded on social theory could guide the general direction of my project as well
as advocating a particular policy on media diversity. In this model, public goods are
determined not by expression of personal interest (or utilitarian purpose), but by
rationally motivated communicative action (or procedural purpose) that requires
"fairness” (equal access to information), “equality” (disregard of hierarchical rank), and
“reasonableness” (rational debate) (Drale, 2004). Therefore, government must support
this procedure because the media market is amoral in meeting such required standards
(Croteau & Hoynes, 2006). Indeed, in Western Europe, the state takes an active role,
which is considered necessary for the democratic function of media in the broadcasting
field (Cavallin, 2000). The state role in shaping media’s democratic function in the U.S.
is, however, questionable due to the First Amendment conflict, which in turn favors
certain policy of media diversity. The detailed policy and government role in promoting
media diversity will be discussed in the following chapter. For the proposed theoretical
framework of the project, see Figure 3.6.
Research Methodology: Multi-Measure Methodology
Consistent with the theoretical framework, and to answer the research questions,
the major areas investigated and assessment include 1) the relationship between the
current broadcasting ownership rules and market concentration, 2) the relationship among
the ownership structure, market concentration, and content diversity in the U.S. broadcast
television market including both public and commercial broadcasters, and 3) application
of both supply and demand perspectives, which measures content by the level of both
57
open and reflective diversity (see Figure 3.7 for the specific indicators & statistical index
for the methodological approach of this project).
Figure 3.6
Proposed Theoretical Framework
Audience Diversity
• Audience
Selection
Public
Policy
model
Program
Choice
model
Content Diversity
Content of
Supply
Content of
Demand
• Open Diversity
• Reflective
Diversity
Structure
Conduct
Performanc
e model
Source Diversity
• Competition
• Concentration
Public
Sphere
model
Media Policy
Public Interest Standards
• Regulation
• Free market
Competition
58
Figure 3.7
Methodological Framework: Statistical index and Indicators
Supply
Demand
Source
Concentration &
Competition
Content
Audience
Program types
Distribution of
preference
• Production
• Distribution
• Herfindahl Index
• Editorial concentration
• CR4 & CR8
• Program genre
• Open Diversity
• Reflective
Diversity
Media Polices
(regulation/
deregulation)
Overall measure of
Media Diversity
• Media consumption
• Herfindahl Index
59
The primary methodological approach in this project is integrative in its nature,
combining qualitative with quantitative methods to achieve a methodological
triangulation. The integrative method can allow an in-depth understanding and
meaningful analysis of the complex motivational context of political and economic
implications to the study of media diversity; at the same time, it increases the validity of
the outcomes of the investigation. With the qualitative approach, the current regulatory
policies relevant to the particular ownership concentration will be analyzed. The
quantitative approach is used to show the structural analysis of ownership mergers and
integration, measuring the level of market concentration and program content diversity in
U.S. television broadcasting. The detailed methodological approaches are explained in
the following.
Qualitative Methodology: Analysis of Media Polices on Broadcasting Ownership
The examination of the diversity policy goals and the effectiveness of the
implementations of broadcasting rules entails a close interpretation of specific problems
stemming from the rhetorical strategies discretely used by each of the parties; the two
major rhetorical strategies examined here include first, government intentions which
stand for political interest, thus, propose the need of collective authority to protect public
interest; and second, the market proponents who stand for economic interests, thus
embrace a notion of market individualism. Discourse analysis with a multivalued
methodological view is useful to recognize the condition behind the problems and enable
us to understand the essence of the existing problems. With an effort to make the
assumptions of their rhetorical strategies explicit, the discourse analysis, directed by the
multivalued view, will answer the specific problems, as well as provide possible
60
resolutions for the direction of future foci in studying media diversity in terms of the
media policies and assessment. The basic theoretical paradigm analyzing public interest
criteria, such as media diversity, critical for policy goals, is the public sphere model that
justifies a significant role of the states in protecting public interest.
Multivalued Methodological View: Integration of Social and Economic Values
The qualitative approach used for this project broadly embraces the multivalued
methodological view. The multivalued methodological view of this project concerns the
implicit political and social values in examining “media policy in relation to media
ownership structure” (e.g., examining antitrust as applied to media integration).
Therefore, it provides a certain criterion for evaluating the concentration on social and
political implications. This multivalued approach, advocated by Bagdikian, justifies the
role of the state, which wishes to avoid both “economic and social harms” from media
concentration (Compaine, 2000). It clings to the idea that the sufficiency of competition
is achieved through controlling the degree of concentration, which is directly linked to
the regulatory system, thus, can consequently maximize media performance in promoting
media diversity. By using the multivalued approach as the criterion for examining the
broadcasting ownership rules and market concentration in the U.S., the study can identify
both regulatory and economic hindrances to media diversity, and how media policy
shapes the concentration of ownership in a particular way (Compaine, 2000). Therefore,
with the application of this approach, the effectiveness of the regulatory policies
implemented in the U.S. broadcasting industry is analyzed.
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Methods
To analyze the use of rhetorical strategies of the particular policy goals by the
FCC, and interpretation of the effectiveness of the policies, the study mainly conducted
an explanatory paradigm that combines documentary analysis with rhetorical analysis
(discourse analysis). The time period for the analysis of the broadcasting rules covers
1950 to 2002 to demonstrate the changing policy goals, and development of ownership
rules during this period. The effectiveness of the policies is analyzed, and interpreted
with an effort to provide possible resolutions for media diversity foci. The data used and
interpreted for that purpose are mainly taken from both primary data and secondary data
sources. The primary data include documents, statements, annual reports from 1939
to1998 made by the Federal Communication Commission (FCC), and government
officials; and secondary data include the relevant articles that consist of the critics of the
diversity policy goals, and the broadcasting rules. For the interpretation of the logic of
regulation, and free market competition, the study primarily used academic articles,
government officials, and FCC documents and statements that review the notion of
freedom of speech in terms of public interest, and how the diversity policies and their
goals revolve around such a notion. For the analysis of particular broadcasting ownership
rules and their effects on media diversity, the study mainly used FCC annual reports, and
existing data from the relevant research on media diversity.
•
Discourse Analysis- Interpreting political, social and economic goals:
The discourse analysis used for this project is mainly to make the existing
problems, such as establishing public interest criteria, explicit in order to increase
the understanding of the underlying assumptions of the policy goals. This method
is also used for interpreting the effectiveness of the policies in order to provide
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possible resolutions to media diversity issues in the U.S. television broadcasting
industries. Within this line, the project analyzes the rhetorical strategies used
within changing public interest standards, and policy goals to the debate over
media concentration, and de/regulation in terms of media diversity. Moreover, it
shows their particular advocacy of the logic of a market concentration paradigm
to contest their positions. Thus with this method, the problems, raised from the
inquiry of the policy goals and effectiveness of broadcasting rules, are interpreted
and analyzed.
Quantitative Methodology: Measuring Supply and Demand Side
Monitoring media concentration involves both supply and demand sides. The
attempt to combine both supply and demand relates to the effort of measuring both
content diversity choices and audiences’ preferences to the content. As emphasized
earlier, the sole approach to either supply or demand often limits a comprehensive
measure of overall media diversity, and the relation between them. When assessing media
content from a supply viewpoint, the diversity index includes both openness and
reflection. On the other hand, the demand viewpoint measures media time consumption
as to indicate audiences’ preferences of the content (see Van Cuilenburg, 2005). The
basic theoretical paradigms that guide these assessments include public policy, program
choice, and the structure conduct performance model (SCP). In analyzing how the supply
of diversity influences open diversity, it follows the logic of the public policy model with
the assumption that public broadcasters provide open diversity. On the other hand,
analyzing how audience demands influence reflective diversity follows the logic of the
program choice model with the assumption that commercial television networks will
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provide reflective diversity to maximize profits. The analysis of the specific market
structure that influences media behavior in distributing content will follow the logic of
the SCP model with the assumption that market concentration, and excessive competition
based on market share (advertising revenue, and audience share) reduces content
diversity.
Methods
I. The units of analysis include 1) market concentration (advertising revenue, and
affiliate share) of the commercial broadcast television suppliers, and the
concentration of distributors and producers of public television, 2) program content
supplied by commercial and public television broadcasters 3) audience viewing of the
programs supplied by commercial television networks during primetime.
II. Data: The data used are compiled from various sources, including The Complete
directory to prime time network and cable TV shows: 1946-present (2003), The
broadcasting year book, FCC annual reports and other financial data, Corporation
annual reports, financial analysis of Universal McCann and Nielson Media research,
and Corporation for Public Broadcasting, published in Media info Center, Television
Bureau of Advertising TVB Online, and U.S census, and other miscellaneous sources,
including CRS reports, Media Bureau Staff Research Papers published in FCC, etc.
III. Variables and Statistical Index:
Supply Side: On the supply viewpoint, the study measures “source diversity”
(ownership concentration) and “content diversity” (Open Diversity for public
television and both Open and Reflective Diversity in commercial broadcast
television).
64
•
Variables for public broadcast television: Policy Preferences in a particular era,
Concentration of Distributors, and Producers were analyzed as independent
variables, and Diversity in Program Content was analyzed as dependent variable.
-
Eight different program categories were initially developed from those
used in the Corporation for Public Broadcast television, and then collapsed
to seven categories. A list of seven categories includes; 1) News/Public
affairs, 2) Information/Skill, 3) Cultural, 4) Children/Youth, 5) Sesame
Street, 6) Others, and 7) Instructional.
-
Time period examined was from 1974 to 1996.
• Variables for commercial broadcast television: Market concentration based on
advertising revenue share, Competition Industry based on affiliate share were
analyzed as independent variables, and Diversity in Program Content that is
supplied and viewed was analyzed as an dependent variable.
-
For Program categories, twenty-one different categories were initially
developed (this coding is modified from twenty-five different program
categories formerly used by the Federal Communications commission),
and then collapsed to seven categories, including; 1) Variety, 2) Drama, 3)
Movie, 4) Situation Comedy, 5) Quiz/Panel, 6) News/Information, and 7)
Others (children, sport, & reality)
-
Time period examined was from 1965 to 2002.
-
Prime time was defined mainly as 8:00-11:00pm from Monday to
Saturday, and 7:00 to 11:00 pm on Sunday
65
•
Herfindahal Index (HHI)- market share based on advertising revenue:
The HHI market share is developed from the concern for the conventional
standards of antitrust law (Compaine, 2000). The effects of market concentration
are measured by the amount of advertising revenue. The measure of ownership
concentration explains the power inequality of the media market share that leads
media competition to be ineffective. HHI is one widely used method because “it
reflects… the number and size of distributions of media firms in a market
industry, as well as the concentration of output (Rhodes, as quoted in Compaine,
2000, p.558). In this study, HHI is calculated by summing the square of the
percentage of a firm's market share of both number of outlets, and advertising
revenue in commercial broadcast television, and the percentage of distribution
share of producers and distributors for public television (not the whole numbers;
i.e., 0.1% indicates 100). The higher HHI means a higher market concentration.
The formula for HHI is as follows:
Where N=Number of firms, S = Percentage of each firm's market share
(advertising revenue share for commercial television and distribution of
producers and distributors for public television)
* Data used for advertising revenue share is from Universal McCann.
•
Editorial Concentration: Editorial concentration is measured by counting the
number of outlets in a broadcast television. This method allows assessing plurality
of channels of each of public and commercial television broadcasters.
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•
Profusion Index:
The Profusion Index allows for the measuring of the homogeneity of media
content reflecting both open (OD) and reflective diversity (RD). It also measures
the quantity of content supply. When ideal diversity is to match OD and RD that
is the perfect balance between the goals of providing content based on the
normative value that matches the desire of reflecting audiences’ preferences or
demands. The original formulas for OD and RD used in this study are mainly
from Cuilenburg (2000), yet variables are modified suited to the study. They are
as follow:
-
OD=1-Σ│yi│/ 2
0 (closeness) ≤ OD ≤ 1 (maximum openness)
Where OD=open diversity, yi= is the difference between the actual
proportion of broadcasting time devoted to program type i and the norm
for program type i in a situation of maximum openness (i.e., 1 divided by
the number of content types categories).
-
RD=1-Σ│zi│/ 2
0 (minimum reflection) ≤ RD ≤ 1 (maximum reflection)
Where RD=reflective diversity, zi=difference between the actual
proportion of content type I and the norm for content types I given
audience demand.
Demand Side: On the demand side, audience preferences are assessed. The top 35
audience rating (ranked by audience size) of the programs is used as an indicator of
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audience demands for content. The audience rating was calculated from the report of
Nielson Media Research.
•
Herfindahl Index (HHI): HHI measures concentration of audience consumption in
selecting programs where HHI is the sum of squares of the audience shares of
programs (i.e., each program ranked by audience size)
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CHAPTER 4
FCC, POLICIES, AND MEDIA DIVERSITY
During the last seven decades, the Federal Communications Commission (FCC)
has regulated broadcast services to ensure that the allocation of broadcast licenses serve
the public interest with an aim to promote competition, diversity and localism, which are
vital to American democracy (Committee on Commerce, Science, and Transportation,
2003). The central policy objectives on media diversity are centered on outlet diversity
(source diversity), particularly at the final stage in the distribution process, in order to
ensure content diversity. Along this line, the Commission has focused on restraining
broadcast station ownership for the purpose of increasing effective competition by
breaking up broadcast monopolies. The emphasis on the diversity policy goal, as Napoli
(1999a) points out, “grows directly out of the First Amendment tradition that stresses the
widest possible dissemination of information from diverse and antagonistic sources” (p.
9). Policy goals in promoting media diversity, however, are not clear-cut, for censorship
to media content is in direct conflict with the notion of the freedom of press, protected by
this First Amendment right. As explained in the previous chapters, the insufficient
definition of media diversity mainly stems from this conflict, resulting in discrete policy
goals, enforcing either “regulation” or “free market competition.” Consequently, the
effectiveness of the media policies is assessed differently depending on whether the
emphasis is either on the economic or social/cultural function of media. When media
diversity is assessed by economic function, the efficiency of the market system becomes
a primary goal; thus, promoting an open market should be taken into consideration for the
effectiveness of the policy. On the contrary, when media diversity is assessed by the
social/cultural function, providing societal needs, such as creating informed citizens, and
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teaching and educating children with quality content (or normative concern), is critical. In
order to achieve this goal, regulation is necessary, for media markets are often amoral in
meeting such criteria. With this concern in mind, this chapter mainly examines 1) the
diversity policy goals within the First Amendment of the constitution in order to establish
“public interest standards” in terms of media diversity, and 2) broadcasting rules on
ownership concentration (source diversity) in order to demonstrate “the effectiveness of
the policy” on media diversity. The broadcasting ownership rules, syndication rules, and
the prime time access rules (PTAR) implemented by the Federal Communications
Commission (FCC), along with the current deregulatory climate, are reviewed and
interpreted to explain the policy objectives and effectiveness, and whether they
functioned to promote or hinder the ultimate goal of media diversity. The effectiveness of
media policies on diversity is examined and discussed with an inquiry of the conflicting
views of the First Amendment in terms of regulation and free market competition. The
objectives of these attempts are to provide an answer for the following inquiries: First,
whether an active role of government promoting media diversity can be made justifiable,
and second, whether the diversity policies focusing on source diversity can be validated
in demonstrating the critical relationship between source diversity and content diversity
in achieving the ultimate goal of media diversity.
The Policy Goals and Diversity
Free Market Competition versus Regulation
Due to the discrete assessments of diversity, achieving coherent media policy
goals seems rather formidable, unless coherent and synthesizing goals, embracing both
perspectives are proposed and proven to be successful. Recently, policy has followed the
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logic of the free market notion, and the public interest standards are rather defined by
economic considerations and consumerist values (Van Cuilenburg & McQuail, 2003).
The regulatory philosophy has shifted in responding to a changing competitive
environment in the media industry, as unregulated markets in the 1980s, and, as no
regulation in the 1990s. Correspondingly, the ideological shift from collective authority
(public sector) to market individualism (private sector) along with the deregulation
climate further facilitates an economic approach to media diversity. Wide acceptance of
free market competition, undermining the government’s role in regulation, is reflected in
the following statement in Address to Media Institute, made by the current chairman of
the FCC, Kevin J. Martin:
And therein lies the most important premise underlying all of the government’s
role in media regulation: while the First Amendment protects one’s right to speak,
it does not guarantee that you will be listened to [Italics added], and competition
among voices is ultimately the best method of ensuring that the most unique and
important information is ultimately heard… we need to critically evaluate our
traditional thinking on how ownership consolidation affects localism and
diversity. For instance, evidence suggests that consolidation actually enhances
program diversity by encouraging owners to create programming [Italics added]
that targets niche markets, rather than producing bland programming that has the
greatest chance of capturing the greatest number of viewers or listeners. (Martin,
FCC, 2001)
Martin’s intended message highlights two major issues; first, they are defining a notion of
the First Amendment within a particular advocating policy, free market competition,
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which protects the freedom of press (e.g., right to speak) over audiences (e.g., will be
listened). In other words, the current policy tends to define public interest as the free
speech right of broadcasters who deliver information to audiences who access the
information. Second, the dramatic changes in the marketplace over years in which
broadcasting is “no longer situated as to be un-deserving of full first Amendment
protections” (Martin, 2001, p. 4); as some researches have proven, consolidation doesn’t
necessarily hamper promoting media diversity. For that purpose, reexamination of the
ownership rule with an aim toward a deregulatory policy should be taken into
consideration for full competition in the media industry.
At this juncture, the consolidation effects that Martin addressed require more
discussion. Traditionally, many researchers have empirically assessed source diversity by
focusing on the number of outlets. Operationalizing source diversity in term of the
number of market participants (plurality of outlet) is useful to indicate the degree of
diversity of the information sources available, but it is not sufficient to assess diversity.
Examining source diversity in terms of market share along with the plurality of outlets
will be more useful in indicating structural inequality (or market power), which often
hinders effective competition in promoting media diversity (Napoli, 1999a).
In contrast to Martin’s statement that seems to reflect economic perspectives in
regulatory policy, the former chairman of the FCC, Reed E. Hundt (1997) addresses the
significance of government’s role in protecting public interests from the possibility of
unethical market practice. In his speech to the Commission Staff, the essentiality of
intervention is illustrated as
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Our digital era philosophy relies on markets to allocate goods efficiently and to
produce innovation, consumer choice, lower prices and better services; but where
the market does not generate goods the public rightly insists on, we respond with
clear and enforceable rules directly tailored to the public interest and necessity
[italics added]. This is a trust-but-verify philosophy. Government should trust
markets, but verify that they are truly serving the interests of communities,
citizens, children. Where they are not, government should intervene with laserlike precision to promote public needs [Italics added]. (FCC, 1997)
Hundt’s statement implies the FCC’s critical role in protecting public interest, and the
need for regulatory intervention, if the market doesn’t guarantee the public needs, public
safety, and public benefits simply due to the markets nature of seeking profit
maximization. More importantly, unlike Martin’s view on the First Amendment as
“freedom of press,” Hundt’s view on the First Amendment is rather defined as “freedom
of communication” that includes “the recipient’s right to information and to be protected
against unwanted messages” (Cuilenburg, 1999, p. 202). His emphasis on demanding
media to serve public interests of communities, citizens, and children defines public
interests as recipients’ (or citizens) right to hear media messages (i.e., freedom of
communication) over a speaker’s right to send a message (i.e., freedom of press); thus the
recipient can be protected by unwanted messages (or harmful to public) produced by
media. The statement also implies that the nature of the market is not a natural system in
achieving public interest goals, but a self-interest mechanism within the commercialized
system. Such a media system inherently requires an active role of government in
protecting public goods, ensuring that media provide quality content to inform citizen and
73
educate children. In this way, his statement reflects the concern for citizens over
consumers.
The Government’s Role in Media Regulation and the First Amendment Conflict
Although the effectiveness of media policy and its goal in promoting diversity are
arguable due to the First Amendment conflict, the necessity of government’s active role
in shaping media content has been proposed by many media scholars (see Cavallin, 2000;
Cuilenburg & McQuail, 2003; McChesney, 1997; Croteau & Hoynes, 2006, etc.). Their
suggestion stems from the significance of states’ role in protecting public interest by
securing the essentiality of media’s social responsibility. Van Cuilenburg and McQuail
(2003) further address the active role of government in protecting public interest, arguing
that, the state has been the effective guarantor of freedom in important respects
throughout the constitutions although it has been professed as the barrier to the freedom
of individual expression. In order to make this argument clear, the provision against any
state restraints on freedom of speech (or expression) deserves more attention for gaining
an in-depth insight of the notion of public interest and media diversity.
The freedom of expression is an essential form and system of the right to achieve
the democratic function of communication. The concept of public interest and the
policies in promoting diversity are closely intertwined with society’s review of this
notion. According to Habermas (1980), non-excludability is one key dimension in
forming an ideal public sphere that can discard hierarchy in obtaining accessibility to
information; thus, citizens should transfer their views to a rationally motivated consensus
without any coercive forces in the process. In this statement, non-excludability not only
implies media’s freedom of press (autonomy/independence of media), but also citizens’
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equal access to the information through an open communication system, which
subsequently directs them to “public” rather than “private interests.” Therefore, the state
role is essential in ensuring the necessary condition for citizens to have equal access to
information, and equal participation to political debates; that is states’ critical role of
insuring citizens’ access in receiving a diverse range of ideas.
In order to understand the essentiality of the states’ role in democratic
communication, and media diversity, it is important to discern the current system of
media and policies in relation to the First Amendment. Winseck (1997) notes that the
First Amendment in the U.S. is viewed as partial democratic communication that often
restricts the states’ right to protect citizens over corporate media. Partial democratic
communication refers to the view of the state role as a coercive obstacle to democracy,
developed from the belief that the self-interest of the administrative system restrains the
freedom of press/expression, thus, may not assure public good. However, this view lacks
the recognition of the current media market where concentrated media power controls the
supply of information. The corporate media power, in this way, can be a potential threat
to serving public interest by excluding citizens’ right to receive a diverse range of ideas
and access to information. Stated differently, partial democratic communication can
provide a shield for exclusive benefits to corporate media which enjoys the First
Amendment right with little restriction from the state. Winseck (1997) further notes the
problem with the negative freedom; that is the inability of distinguishing between
corporate media (i.e., corporate right) and citizens (i.e., human right) in relation to the
state role: The distinction between private people (citizens’ rights), and private corporate
(corporate media rights) coming together as public.
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The concern of negative freedom relates to the assumption that public interest
goals are optimally achieved when “state,” “capital,” and “civil” take balanced integral
parts in shaping democratic communication. As a concentration of administrative power
(state) can potentially threaten the open communication system by imposing totalitarian
ideology, a concentration of corporate power can also be detrimental to the democratic
communication process by controlling the access of public information based on their
organizational interests (e.g., maximizing profits). Therefore, the partial relationship
between corporate media and state, excluding citizens’ rights to access a diverse
representation of independent voices and political/cultural opinions, raises the need for a
reexamination of the state role within the scope of the First Amendment to protect public
interest. The freedom of press can be protected only if media fulfill a democratic
function, which is to provide diverse ideas and equal access to civil society against
potential abuse of administrative controls. Croteau and Hoynes (2006), however, question
the role of media as a “watchdog of government” (p. 9). The problem stems from our lack
of discerning where the media system fits into the capitalist structure of society and how
economic forces have changed the role of media. In practice, with the culmination of
hyper-commercialization the media have indulged the self-interest mechanism of creating
profits (see Albarran, 2002; Cavallin, 2000; Croteau & Hoynes, 2006; Gomery, 2000;
McChesney, 1998 & 2004a, etc.), and in turn encourage consumption instead of
informing citizens. Although the roles, and relationships among State, Capital, and Civil
have been changed, corporate media still enjoy the freedom of press that protects the
media goal to maximize profits. This explains the main focus of the regulatory issue
relating to the underlying concern for the demands of an adequate level of states’
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intervention rather than states’ hands off positioning, in order to protect public interest.
Hence, the question of states’ intervention concerns what to regulate, and in what degree
rather than involvement or noninvolvement of the state in terms of media serving
diversity. This provides the justification of regulation when media don’t meet societal
needs.
Regulating Broadcasting and Establishing Public Interest Standards
The social theory, validating the normative principles for a media system and
assuming media serving the general benefit of society, provides the rationale for the
assumption that proposes defining public interest by government role rather than by free
market competition in the broadcast industry (see Chapter 3 for a detailed explanation of
the core assumptions of the social theory). The social theory premises regulation as a
necessary tool for improving the industry performance of media in order to avoid market
failure, and to protect public interest. The four widely accepted criteria for determining
market failure, and justifying regulatory intervention are “broadcasters as monopolist,”
“the pervasiveness of broadcast programs,” “insufficient diversity,” and “access to a
scarce resource” (see Krattenmaker & Pow, 1994).
The first promise, broadcasters as monopolists, is concerned with market power
that exercises certain control over the industry. It also assumes that each broadcaster has
an obligation to its audiences because broadcasting is the major source for audiences to
access information, including both news and entertainment. The second promise, the
pervasiveness of broadcast programs in society, concerns the significance of broadcast
effects on society due to its pervasive presence in society. Broadcasting, particularly
“broadcast television plays a major role in the everyday lives of Americans and is the
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primary source of news and entertainment for most households,” (Hundt, 1996), which
essentially involves other serious social considerations being at work. Thus, if
broadcasters do not serve public interests (or societal needs), they can potentially harm
society with their great influence. Since the second promise assumes media influence on
societal/political values, it essentially justifies media serving social duties. This
assumption also closely connects to quality content providing diverse cultural and social
viewpoints throughout educational, and informational programs that must benefit society.
This view relates to media diversity shaped within social and political perspectives.
The third promise, insufficient diversity, assumes that competition based on the
economic principle doesn’t satisfy the diversity goal which is achieving diversity of
programming. This is mainly because media productions are information, which can’t
simply be measured by the economic standard of competition. Competition in the
broadcast industry is largely determined by profit maximization, thus, is often amoral.
Therefore, regulation will be needed to promote diversity. The fourth promise, access to a
scarce public resource, assumes a social duty of media due to broadcasters’ free access to
scarce resources. Since broadcasters are granted, at no cost, the exclusive use of a scarce
public resource, they should be obligated to return social goods not social harms in a
socially responsible manner (see Krattenmaker & Powe, 1994). All of these promises
provide justification for the regulation against market failure. More importantly, they
provide the foundation for establishing public interest standards on the basis of medias
serving a public role.
These promises provide a general guideline in defining public interest standards,
and accordingly policy goals in promoting media diversity. In fact, establishing general
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public interest standards is critical and necessary for the foundation of media’s
democratic performance. The arbitrary and capricious broadcasting rules in promoting
diversity throughout history (Napoli, 1999a) explain the government’s ineffective
response to market failure, which in turn fails to justify regulatory intervention in the
media market. And this failure can be attributed largely to the inconsistency of defining
public interest standards. In other words, the policies should be consistent with public
interest standards (i.e., philosophical underpinning of policy goal), yet at the same time
should consider specific market conditions (i.e., practical implementation of policy to a
specific market). The examination of broadcasting rules in the following section will
explain such aspects in terms of the relationship between media policy and source
diversity.
Media Policies and Diversity
Regardless of contradicting goals in achieving diversity, the regulation of the U.S.
government has often focused on competition in the media market, which is the concern
for ensuring pluralistic outlets of media. As far as broadcasting is concerned, the FCC has
authority through the demand to protect public interest while the Federal Trade
Commission (FTC) has statutory authority over antitrust. The question that has been
raised in terms of media policies on diversity is whether to determine regulation either on
the number of group owners and outlets (source diversity) or market concentration based
on their market share, in conjunction with a concern for the degree of regulation in terms
of specific market conditions. Another major concern is whether the regulation goal
should involve the requirement of quality programming, including public affairs, and
79
educational programming over the plurality of program choice as far as content diversity
is considered.
Antitrust and Criteria: Regulations on Concentration
One major policy relevant to diversity is antitrust, through which the government
attempts to breakup market concentration or industrial monopolies. Antitrust law explains
government’s effort in creating effective competition by controlling ownership. This
policy tool has a long history, traced back to the Sherman Antitrust Act. The Sherman
Act is intended to protect the public from control of economic power in a highly
concentrated industry. In brief, the Act restricts monopoly ownership as unlawful to
protect the public. When unfair advantages of major owners in a highly concentrated
industry, granted by exercising power in determining distribution prices, harms the
development of new products or related industries, it is considered as violating the law.
The specific implication of the antitrust law, and its applications, however, are not clearcut, which raised heated debates on the relevant cases among policy makers and scholars.
The problem that both the policy makers and scholars have faced is difficulty in defining
a monopoly and identifying what aspects of the monopoly practice are harmful to the
public, and what are the unfair advantages. For the most part antitrust cases are
convoluted in fact-finding, negotiation, trial, and appeals that involve long periods of
time (Compaine, 2000). All these explain that not only antitrust law has been suffering
from insufficiency of defining public interest standards, but also antitrust is to be
understood on a case-by-case basis with the consideration of a particular condition.
The most well known antitrust activity that had an impact on the broadcasting
industry was the Paramount case, which was against the motion picture monopoly of the
80
1940s (1938-1949). During that time, the movie industry was dominated by five
vertically integrated firms, MGM (Loew’s), RKO (Radio-Keith-Orpheum), Fox, Warner
Brothers, and Paramount. The U.S. justice department was concerned that such
dominance provided an unfair privilege to them by letting them have complete control
over production and exhibition in the industry. Consequently, such control was
considered as hindering independent theaters at entry level by fixing prices for firms. The
Sherman Act was a direct corollary of this concern, attempting to break up the vertical
integration by enforcing a price-fixing combination as a violation of the law. The public
interest criterion behind this Act was the application of the First Amendment right of
citizens to have access to diverse ideas. In fact, this antitrust criterion reflects the notion
of the First Amendment upholding citizens’ rights to receive information over media’s
right to produce and distribute content.
This antitrust action successfully broke up the monopoly of the Hollywood studio
system, and has had a continual impact on the television industry in later years. For
example, television networks were prohibited from owning programs with the aim of
breaking a monopoly of television production and exhibition in the 1970s and 1980s
(Croteau & Hoynes, 2006). However, with the deregulation policy implemented in the
1990s, both movie studios and television networks went back to the position of owning
distribution channels and programming respectively. Beyond the implementation of
antitrust law to break up monopolies, media policy also faces the difficulty of providing a
way to best serve diversity within the notion of public interest.
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Early Broadcast Ownership Concerns and Issues
Concerned with promoting content diversity, the FCC has followed a policy that
regulates the ownership of broadcasting services in part to change content. Campaign et
al., clearly address the FCC’s effort to promote content diversity by controlling source
diversity noting, “ in the volumes of FCC hearings and reports on questions of ownership,
a key and constant element is use of term “diversity.” It is repeatedly asserted that
diversity of media control is in the public interest … but because such ownership will be
more likely to provide a broader variety of content choices to the public” (1979, p. 74).
The state’s effort to protect the public interest can be traced to the
Communication Act of 1934, which provides the fabric of broadcast diversity policies. It
espoused the right of citizens (audiences) over broadcaster in interpreting the notion of
public interest. The Act, in which the jurisidiction over radio licensing transferred from
the Federal Radio Communication to the FCC, contained existing provisions of the Radio
Act of 1927. The initial regulation that has a major impact on broadcasting was the Radio
Act of 1912. The regulation of radio communication mainly originated from the need of
controlling airwaves when the government found it difficult to transmit government
messages due to the chaotic mix of airwaves during that time (Einstein, 2004a). In breif,
the Act is stated as
This was the first domestic law for general control of radio communication…The
Radio Act regulated the character of emissions, transmission of distress calls, set
aside certain frequencies for government use, and placed licensing of wireless
stations and operators under the Secretary of Commerce and Labor, now
responsible for the licensing of radio stations and operators. The actual licensing
82
process began in 1912. This law governed the regulation of radio, including the as
yet little-known concept of broadcasting until 1927. (FCC, 2006)
The Radio Act of 1912 provides at least two key issues; first, government controls
airwaves through licensing (i.e., control of information throughout media ownership), and
second, the radio spectrum is provided on the basis of government provision (see
Krattenmaker & Powe, 1994; Einstein, 2004a). The reasons for the failure of the Act are
briefly explained as the rapid growth of radio broadcasting, convoluted with the
technology issue, in which government wasn’t prepared to effectively control. In other
words, the existing technology couldn’t allow audiences access the abundant information
and ideas available from many sources including government, universities, corporations,
and amateurs. Einstein (2004a) gives a clear description of the technology issues that
caused the failure of the Radio Act of 1912 in terms of creating diversity:
Regulations were based on spectrum allocation, that is issuing licenses to
broadcasters allowing them to use a segment of the radio spectrum on which they
can send their signal through air. Underlying the need to mete out this resource is
the concept of “spectrum scarcity.”… As early as the mid-1920s, technology
existed that would overcome the perceived shortage in spectrum. Seventy years
latter, technology had increased so that only a limited part of the spectrum was
allocated to broadcasting. In 1983, Pool explained, “only about 2 percent of that
spectrum is now devoted to broadcasting for both radio and television, but of the
frequencies that policy makers considered in the 1920s, as much as half was
dedicated to radio broadcasting. (pp. 10-11)
83
The underlying issue of the Radio Act of 1912 beyond its lesson from failure is first the
government’s application of the public interest criteria was on the basis of the states
priority of use (e.g., for the purpose of transmitting military and government messages)
over societal needs. Second, the government wasn’t prepared to adequately control the
airwaves, and decided the need of allocating licenses to broadcasters mainly because of
an insufficiency of recognizing the particular radio market condition (e.g., the
government belief in spectrum scarcity with little regard to the technology issue).
Unfortunately, the spectrum allocation, on the basis of the government’s belief in
spectrum scarcity, proved to be a benefit for major broadcast networks because limited
spectrum and the need to avoid interference among stations allowed few networks (three
large corporations) to dominate broadcasting; that is, in fact, a restraint of competition
and diversity. Correspondingly, concentration of broadcasting stations whether through
group ownership, cross ownership, or duopoly ownership has been a serious concern as
well as a controversial issue since the 1920s. Followed by the passage of the Radio Act of
1927, and enactment of the Communication Act of 1934, ownership control of the
broadcast service has been a major issue. And even today, six decades after its first media
ownership order, the FCC is still struggling with regulating multiple ownership to both
duopoly and media cross ownership, in an effort to make monopoly ownership unlawful.
Multiple-Station Ownership Rules
Ownership Rules under Numerical Limits of Stations
Although multiple station ownership was presented in the late 1920s, shortly after
radio broadcasting was authorized, and extensively discussed with the enactment of the
Federal Radio Act of 1927 and the Communication Act of 1934, the first regulations
84
limiting the extent of station ownership were introduced in 1940. These rules, known as
Rule 4.77 and 3.228, limited TV and FM radio stations by establishing “an upper limit of
three experimental TV stations and six frequency modulation stations under common
control” (Howard, 2006, p.14). The FCC’s first regulation that affects the dual operation
of two standard (AM) broadcasting stations in the same market area was issued in 1941.
The rationale behind the issue was to relax the control of two major broadcasting
networks, NBC and CBS, thus eliminating dual operation of broadcast services at both
the national and local levels. At the time, however, specifying the limit of television
ownership was seen as somewhat inappropriate, for only eight stations had been licensed
to operate nationally, and three of those were not even fully operational (Gelman, 1963,
quoted in Howard, 2006). As a result, anti-duopoly prohibition and an upper limit of five
TV stations, which used be limited to three stations, were enacted in response to the issue
of serious expansion in the television industry. 48 % (24 stations) of all operating TV
stations (50 stations) were part of multiple-station organizations in 1949.
The FCC’s serious concern for public interests and its effort to promote diversity
were reflected in the first comprehensive rules of multiple station ownership issued by
the Commission in 1953 (FCC 1953). The purpose of the rules is stated as
the multiple-ownership rules is to promote the diversification of ownership in
order to maximize diversification of program [italics added] and service
viewpoints, as well as to prevent any undue concentration of economic power
contrary to public interest [italics added] and thus to carry out the underlying
purpose of the Communications Act to effectuate the policy against
85
monopolization of broadcast facilities and the preservation of the broadcasting
system on a free competitive basis. (FCC, 1953, p. 1563)
This statement explains the FCC’s commitment to promote program diversity by
ensuring diversity of ownership (source diversity) with the recognition of the significant
role of the multiple ownership that plays in the national broadcast service. Moreover, it
highlights promoting diversity as a key dimension of serving public interest and the FCC
believed that specifying the number of stations allowable could prevent concentration as
well as protect public interest. Under the purpose of serving public interest, the
comprehensive rules were specifically developed from the concern for the competitive
imbalance between VHF (very high frequency) and UHF (ultra high frequency) stations,
in which UHF was unable to get network affiliations. The attempt to allocate VHF and
UHF bands in a fair and equitable TV channels was the groundwork of the rules for an
efficient and competitive Nation-wide television service. More specifically, the purpose
of utilizing both VHF and UHF was for a “partial lifting of the freeze under certain
conditions, and the reservation in specific communities of television channels for
noncommercial educational use” (FCC Annual Report, 1950, p. 180). The rule proposed
to promote UHF was the adoption of the rule of seven. These rules limited a single owner
to seven stations, and a maximum of five TV stations of VHF facilities, seven FM
stations, and seven AM stations (FCC, 1953). The rule of the numerical limit of multiple
ownership, shortly after the UHF modification extension in 1954, had remained the same
over three decades.
Recapitulating the major argument regarding the first comprehensive rules, the
rules were designed to prevent undue concentration, and provide diversity of both sources
86
and program, range of program sources, ideas, and viewpoints. However, as Howard
(2003 & 2006) argues, the rules where the FCC sets numerical limits of broadcast
stations effectively authorized group ownership, which becomes the foundation for the
broadcast industry structure in the following years. Stimulated by the condition of
limiting ownership by the Commission, during the 1950s, most independently owned
stations were sold gradually to the groups. Consequently prices for stations with desirable
locations were increasing. In acquiring TV stations within the numerical limit of seven
stations, owners buy large market stations, and sell those stations in smaller markets,
called the “trading up” process (Barrett, 2003; Howard, 2006). The result shows the
failure of the FCC’s strive for concentration control to promote diverse opinions because,
in practice, the rules of seven actually promoted the development of group ownership in
the broadcast industry. The ineffectiveness of these rules is attributed to the ignorance of
economic potentials, in which the FCC counted concentration on the basis of the number
of stations (plurality concern or concern for maximizing the number of separately-owned
media outlets) without accounting for owners’ potential audience coverage (market
power). Therefore, “it encouraged owners to buy large market stations and sell those in
smaller markets routinely as they sought to fill their ‘quotas’ with increasingly profitable
stations” (Howard, 2006, p. 30). See Table 4.1 for the change in group ownership. Table
4.1 indicates that group ownership from the Pre-Freeze to 1980 has greatly increased
from 37 % to 68.3 % due to acquisitions and mergers. Consequently, the concentration of
networks, and their growth of power in the television network became a great concern of
the FCC in responding to protecting public interest relating to diversity issues.
87
Table 4.1
Group Ownership of U.S. Television Stations. 1950-1980
Year
No.
Group owned
40
294
440
506
1950
1960
1970
1980
Total No.
Stations
108
523
677
741
%
Group owned
37.0
56.2
65.0
68.3
Source. Data complied from Howard (1983, 1995, & 2006)
However, as the Commission was premised to increase educational channels by
facilitating more use of UHF, the relative percentage between educational and
commercial channels shows a rapid increase of educational channels while commercial
channels are decreased competitively from 1950 to 1984. Thus, the first comprehensive
rules utilized increased educational channels although they effectively provided a
foundation for group ownership structure in the broadcast industry. Commercial versus
the educational channels and comparative percentages until the ownership rule adoption
in 1984 are represented in Table 4.2.
Table 4.2
Group ownership of U.S. Television Stations. 1950-1980
Year
VHF
Total
UHF
Total
1950
1955
1960
1965
1970
1975
1980
1984
NA
NA
346
468
597
607
639
649
NA
NA
76
92
297
332
493
531
Commercial
TV
(on air)
104
458
579
589
691
706
746
893
Source. FCC annual reports.
NA: not available
Educational
TV (PBS)
(on air)
0
11
47
92
190
243
267
297
%
Commercial
TV
100
97.7
92.5
86.5
78.4
74.4
73.6
75.0
%
Educational
TV
0
2.3
7.5
13.5
21.6
25.6
26.4
25.0
88
Consideration of Economic Potentials: Numerical Limits of Stations and Audience Reach
The FCC has limited the national ownership of television broadcast stations since
1941. The rules were modified several times in the mid 1980s, primarily caused by
changed market environments in broadcasting. In 1983, the FCC re-examined multiple
ownership mainly due to increasing numbers of broadcast stations, cable TV services,
and other nontraditional broadcast-like services (Howard, 2006). Responding to the
change in the media market environment, the substantial expansion of media choices, the
FCC noted that the potential for national ownership concentration which might threaten
diversity had been reduced. In 1984, a new approach to national ownership was instituted
by the FCC as a six-year transitional ownership of 12 television stations nationwide (12station limit); that is the expansion of the numerical limits of stations from 7 to 12. On reexamination of the ownership rules, in 1985, the FCC adopted additional ownership
limits based on “audience reach” which allowed an entity to acquire interests in television
stations as long as the combined reach of those stations didn’t exceed 25 % of the
nation’s television households (i.e., national audiences) as determined by market ranking
(Goldfarb, 2006; Committee on Commerce, Science, and Transportation, 2003). Thus,
briefly defining the adaptation of the rules, National Television Ownership, in practice,
“applies to the major broadcast networks, limiting them to ownership and operation of
local broadcast stations which reach the prescribed percentage, in total, of U.S. television
households.” (CRS Report for Congress, 2006, CRS-16). The FCC’s accounting of the
audience reach for the ownership rules in addition to the numerical set of stations, in fact,
shows their acknowledgement of audience coverage for a group owner, valuing economic
potentials. Under the 12 and 25 % rule, retaining numerical limits of 12 stations could be
89
interpreted as the FCC’s effort to prevent acquisition of the number of stations in smaller
markets while the institution of 25% rule apply to the potential economic value of
stations (FCC, 1984). In applying this 25 % cap, group owners’ audience reach
(estimation of households) along with their location of stations owned by groups, became
a critical factor for utilizing local television market research. In brief, the rules can be
characterized as a compromise between the issues of numbers of ownership (e.g.,
pluralistic competition) versus market potentials (e.g., concentration of market power) in
reaching audiences for an assessment of the monopoly threat to the diversity issue.
Soon after the rule, 12 stations and 25% went into effect, the broadcast industry
underwent significant structural changes, in which there had been more consolidation
from 1985 to 1995 by providing the condition for group owners to obtain more station
holdings as other individual stations fell under the influence of mergers, acquisitions,
takeovers, and some other form of integration (Howard, 2006). See Table 4.3 for group
ownership and numbers of group ownership from 1985 to1995.
Table 4.3
Group Ownership and Number of TV Groups. 1985-1995
Year
1985
1990
1995
%
Group owned
stations
73.0
77.2
77.6
No. Multiple
station TV groups
180
207
210
%
No. Multiple TV
groups
27.3
24.1
23.4
Total stations
660
843
898
Source. Data compiled from Howard (1983, 1995, & 2006)
From the data, the percentages of group owned stations increased while the percentages
of numbers of multiple TV groups declined from 1985 to 1995. This indicates that both
90
numbers of the TV groups and group owned stations were declining during these years.
Although the number of multiple TV groups increased from 180 in 1985 to 210 in 1995,
the average percentage of numbers of the TV groups declined from 27.3 % in 1985 to
23.4 % in 1995, as total stations have increased more than the number of groups.
The rapid increase of stations and steady growth of group owned stations during
that time were the corollary of the success of the UHF channels. When applying
economic values to the ownership rules, such as accounting for audience reach, the FCC
also provided a 50% UHF discount for the purpose of developing the UHF stations. It
was recognized that UHF stations are incompatible to VHFs in their technical coveragethe higher power requirements, and greater expenses than VHFs. Thus, the 50% UHF
discount was inevitable in removing the competitive handicap, warranting a discount to
all UHF outlets (see Table 4.4 for the UHF/VHF channels from 1985 to 1995).
Table 4.4
VHF/UHF Educational and Commercial Channels. 1985-1995
Year
1985
1986
1987
1988
1990
1991
1994
1995
No.
VHF
Commercial
541
547
542
543
552
556
559
559
No.
UHF
Commercial
379
435
463
506
560
572
598
620
Source. FCC annual reports
No.
VHF
Educational
113
111
115
119
125
125
123
123
No.
UHF
Educational
186
192
203
214
228
233
240
240
%
Commercial
%
Educational
75.4
76.4
76.0
76.0
76.0
76.0
76
76
24.6
23.6
24.0
24.0
24.0
24.0
24
24
91
As shown in Table 4.4, UHF outlets had rapidly increased from total stations of 565 (379
commercial & 186 educational channels) in 1985 to 860 (620 commercial & 240
educational channels) in 1995 while VHF stations have remained at a similar rate of
growth. At this juncture, it is important to review the FCC’s original purpose of
increasing UHF stations; as stated earlier in this chapter, the purpose of developing UHF
stations was to promote diversity under public interest criteria, and increase educational
channels in program content. It is apparent that the increase of UHF channels indeed
provided more educational channels from 1950 to 1984 as Table 4.2 evidences. However,
the percentage of increased educational channels during that period (an average of 25 %)
has remained somewhat similar from 1985 to 1995 although there was an astonishing
growth of UHF channels. It was mainly because the growth along with the UHF discount
was largely in commercial channels rather than in educational channels.
The UHF discount is justified by the belief of the importance of traditional
broadcasting, in which UHF stations have greater difficulty in reaching audiences who do
not obtain local television stations over a cable television system, counted as roughly one
third of American viewers (FCC, 2000). However, the 1998 Biennial Regulatory Review
explains the potential abuse of this policy that might go against its intended purpose:
As Univision points out in its comments, if there were no competitive disparity
between VHF and UHF television, we would expect group owners to take
advantage of the UHF discount by selling their VHFs and buying UHFs. The fact
that few, if any, group owners have used this strategy suggests that the market
recognizes a continuing competitive disparity between the two services.
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Accordingly, we cannot say the discount is no longer in the public interest as a
result of competition. (1998 Biennial Regulatory Review, 2000, sec IV)
This statement provides some important aspects related to the diversity issue. If
increasing the UHFs didn’t satisfy the purpose of balanced source diversity, and thus
balanced program content, then it might need a re-examination of this rule with a closer
interrogation on whether there was potential abuse of the policy in terms of the diversity
issue. This also points out the need for the FCC’s close monitoring of content diversity in
relation to source diversity in order to critically examine the effects of source diversity on
content because, as noted earlier, the ultimate purpose of diversity, and the reason for
preventing any undue concentration of economic power (controlling source diversity) is
to maximize diversification of program (content diversity).
The Telecommunication Act of 1996
The 1984 and 1985 broadcast ownership rules had remained the same until the
Telecommunication Act of 1996 was passed. Under section 202 of the
Telecommunication Act 1996, the FCC adopted a 35% cap and eliminated the numerical
limit of 12 stations nationwide; that is in fact the elimination of both duopoly (e.g., one to
a market rule), and cross media ownership (e.g., ownership of newspapers and a TV
station in a common market condition). More specifically, the rules reflect the FCC’s
concern for effective competition by eliminating the numerical limits of stations.
The Act intended to protect consumers against monopolies and to guarantee the diversity
of voices, and viewpoints, and to prevent undue concentration in television and radio
ownership (Clinton, 1996; Gore, 1996). However, as the limits on stations’ ownership
were lifted by the Act of 1996, acquisitions and mergers were rapidly increased. Croteau
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(2003), in his remarks on the Federal Communications Commission Broadcast
Ownership EN BANC, identified the failure of the deregulation policy as
Unfortunately, relaxation or elimination of existing ownership regulations would
move us in exactly the wrong direction. While increasing the profits of major
media conglomerates, such changes would, in all likelihood: promote further
concentration of media ownership, thereby undermining competition; reduce the
already limited diversity in commercial media content; and reduce the quality, and
sometimes the quantity, of locally produced media content. None of these are
good for our country or for our democracy. (p. 1)
As Drushel (1998) found, horizontal concentration of the top radio market has almost
doubled as major conglomerates, such as Disney (ABC) and CBS have acquired
individual stations along with other group owned stations. Likewise, Howard (1998 &
2006) indicated that group owned TV stations rapidly increased whereas the number of
group owners declined due to merger activities. The group ownership and the number of
groups from 1997 to 2002 are represented in Table 4.5.
Table 4.5
Group Ownership and Number of TV Groups. 1997-2002
Year
1997
2002
%
Group owned
stations
84.6
85.9
No. Multiple
TV groups
184
142
Source. Data from Howard (2006)
%
No. Multiple TV
groups
15.5
10.6
Total stations
1,189
1,338
94
Table 4.5 indicates that the percentage of group owned stations in 1997 reached 84.6 %,
and in 2002, it increased to 85.9 %, while the percentage of numbers of multiple TV
groups has significantly decreased from 15.5 % in 1997 to 10.6 % in 2002. When
compared to the condition before the Act of 1996 was passed, such as in 1995 (see Table
4.3), these changes were rather dramatic. The percentage of group owned stations jumped
from 77.6 % to 85.9 % while the percentage of numbers of multiple TV groups declined
from 23.4 % to 10.6 % during 1995 to 2002 (see Table 4.3). The premise of promoting
diversity and breaking monopolies through the Telecommunication Act of 1996, in this
sense, has failed due mainly to the FCC’s ignoring the factor of market power, and
focusing on the plurality aspect of concentration in controlling source diversity.
The new television ownership rules of 1996 that the combined potential audience
coverage does not exceed 35 % the national cap, consequently allowed broadcast groups
to own an unlimited number of TV stations in different markets. This was providing a
condition of increased mergers stimulated by vertical integration that would include a
broadcast network and a program production studio under the same corporate entity.
Thus, the profits and expenditures keep circulating under the same corporation roof. The
vertical integration directly influenced duopoly rules that have long been prohibited in
television industry. In 1999, under the influence of the Telecommunication Act of 1996,
the FCC modified the local television ownership rules eliminating the duopoly rule in
some markets under certain conditions, allowing station groups to own two television
stations in a common market. Obviously, permitting duopolies would result in a
consolidation of the broadcasting industry. The merger between CBS and Viacom in
1999, Fox’s acquisition of WPWR, a Chicago television station in 2002, and NBC’s
95
merger with Telemundo in 2002 are examples of giving the companies duopolies, and
accordingly concentration. The expectation is that more duopolies will be created in
medium to small markets and networks will continue to acquire as many stations as
possible under the rules, facilitating more consolidation including both horizontal and
vertical integration. In other words, it provides a license for large stations to get larger
networks and to have more control over the distributions of their business (Einstein,
2004).
Syndication Rules and PTAR
The FCC’s effort in breaking up the networks’ dominance (e.g., ABC, CBS, &
NBC) over the television broadcasting service is also apparent when the Commission
institutes syndication rules (fin-syn), in conjunction with PTAR (Prim Time Access
Rules) in 1970. The purpose of the syndication rules are stated as
The fin/syn rules, which were adopted in 1970 to limit network control over
television programming [italic added] and thereby foster diversity of
programming through the development of diverse and antagonistic programming
sources, restricted the ability of the three established networks (ABC, CBS, and
NBC) to own and syndicate television programming. (Review of the Syndication
and Financial Interest Rules, 1995, para 3)
These rules reflect the policy goals that control source diversity (in this case, producer of
programming, not the media outlet) to achieve content diversity (in this case, program
diversity). The FCC’s focus on source diversity to achieve content diversity is a direct
corollary of the First Amendment conflict where content diversity, the ultimate goal of
media diversity, was never achieved by the FCC’s direct control over content. Although
96
the policy goals of cross ownership rules, and syndication rules are the same in breaking
the broadcasting monopoly, and regulating source diversity in controlling content
diversity, the syndication rules are specifically designed for increasing “independent
producers” to enhance content diversity during network prime time hours. This attempt
indicates that the FCC’s shifting focus to source diversity (ownership diversity) from the
distribution system to production system with an assumption that controlling producers of
programming rather than increasing the number of outlet sources would more effectively
increase content diversity. With an effort to define source diversity (ownership diversity)
by separating program ownership from outlet ownership, the FCC provides a specific
concern for content diversity (diversity of prime time program), which had been
previously ignored by the FCC’s strait focus on ensuring outlet diversity with little
intention of monitoring content. The FCC’s effort to define source diversity, and specific
concern for program diversity (content diversity) and the specific focus area of PTAR are
reflected in Hundt’s (1996) expressed concern for broadcasting diversity:
The Commission seems to be interested in at least four different notions: outlet
diversity, source diversity, voice diversity, and program diversity. "Outlet
diversity" [italic added] is relatively straightforward -- the Commission would like
to maximize the number of separately-owned media outlets. "Source diversity"
was invoked to promote the development of a number of upstream programming
producers and was the justification for the Fin/Syn and Prime Time Access Rules,
also known as PTAR [italic added]. "Voice" diversity -- or viewpoint diversity -describes, in my opinion, editorial perspective… "Program diversity" is more
complicated, but perhaps most important [italic added]. Program diversity means
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that it is a good thing if lots of different types of programming are shown on
television. (FCC, 1996, para 6-11)
As the statement indicates, the implementation of Fin/Syn and PTAR is to enhance prime
time program diversity by increasing competition of programming producers (not
distributors or outlets). More importantly, it shows the Commission’s attempt at
separating the distribution (called outlet diversity in the statement) from production
system (called source diversity in the statement) as an affective means of controlling
source diversity (ownership diversity-the general terms used in my study, including both
outlet and program ownership) to actively shape content. However, this statement also
explains the FCC’s true measure of source diversity (diversity of program producer) on
the basis of the number of program producers rather than inequality of market power
based on market share, in which the justification of the rules was made for increasing a
number of independent programming producers. Assessing source diversity in terms of
number of participants (i.e., producers), although it “provides the degree to which a
diversity source of information is available,” still limits accounting for “the possibility
that the market is structured in a way that prevents all sources from having reasonable
access to the audience” (Napoli, 1999a, p. 12). In other words, the indication of possible
structural inequality can be more effectively identified by distribution of market shares
(audience shares).
More specifically, the syndication rules and PTAR were meant to prevent the
networks’ dominance by limiting financial interests in programming produced by
external producers. The PTAR “prohibits television states affiliated with ABC, CBS, or
NBC network programming in the top 50 prime time markets from broadcasting more
98
than three hours of network programming or off-networks programming (i.e., returns of
programs formerly shown on the networks) during four hours of prime time” (FCC
Repeals PTAR Rule, 1995, p.1). In other words, the PTAR is a restriction of network
programming production that local television stations owned by (or affiliated with) a
network could air during prime time. These rules were further solidified in 1977 with the
consent decrees executed by the Justice Department. By providing greater access to offnetwork programming and facilitating the growth of independent stations, the
Commission hoped to promote diverse program choices during the whole of prime time.
The justification of these rules can be related to forestalling networks’ vertical
integration (the control of production, distribution, and exhibition processes) that
inherently facilitated the dominance of networks with their increasing economic power
(McAllister, n.d.). By eliminating the incentives for the networks to produce programs
during prime time hours, these rules could separate ownership production from
ownership distribution, and, consequently hinder the networks to be vertically integrated.
As a result, these rules offered benefits for independent television stations from the
separation of the networks from syndication, or from removing networks’ financial
interests in programming production.
In spite of the justification of the rules, the critics raise the questions that the
syndication didn’t provide the solution for the intended problem. The intended purpose of
the rules as stated earlier is to enhance content diversity by encouraging effective
competition in television programming. However, as FCC chairman Hundt (1996)
admitted, the intended purpose of promoting program diversity certainly wasn’t achieved:
The Commission says it has an interest in fostering broadcast "diversity."
99
However, the Commission has not always been very clear about what "diversity"
means… Structural rules promoting outlet and source diversity, however, do not
necessarily give us either voice or program diversity. (Hundt, 1996, para 6 & 17)
Two reasons that the rules were not clearly evaluated were first the inconsistent
measurement of concentration in programming caused by the FCC’s insufficient defining
of diversity, particularly source diversity (ownership diversity). As Hundt states, the FCC
broadly refers to source diversity as measuring the number of program producers while
outlet diversity is referred to as measuring the number of independent outlet sources
delivering programs with a clear distinction between them. However, the indicator for
assessing ownership diversity is rather complex, and distinction between ownership of
content producers and distributors seems somewhat artificial because they often operate
simultaneously. Napoli (1999a) provides serious shortcomings of definition problem of
source diversity (program diversity) that the FCC defines in the following statement:
Under the executive producer measurement methodology, concentration the
program production industry appeared to have declined over the years. In
contrast, under the copy-right holder methodology, concentration had increased.
Thus, under one measurement standard, the Fin-Syn rules had been effective in
achieving one of their primary goals-reducing ownership concentration in the
program production industry. According to another measurement standard, the
Fin-Syn rules had been a failure. (p. 13)
The FCC ultimately relies on copyright holder methodology (the number of different
copyright holder) in assessing program sources (FCC 1993). Such contradictory
methodological standards and the FCC’s ultimate support for one over the other
100
methodology explain the imminent need of developing a carefully planned assessment
from the beginning which can be applied effectively in a consistent manner over time.
Second, the FCC’s failure of demonstrating the critical relationship between source
diversity and content diversity caused by a lack of intention to monitor content.
Developing the most effective assessment of diversity can be facilitated only when the
FCC strives to continually monitor content diversity (ultimate goal of diversity) and
identify what indicators of source diversity actually influence content diversity. Along
with the methodological contradiction due to the FCC’s insufficient defining of source
diversity, the inquiry of the effectiveness of these rules requires a close investigation of
the critical relationship between source and content diversity. As Napoli (1999a) notes,
the policies often fail to demonstrate the assumed relationship between source and
content diversity. Although the syndication rules were to enhance content diversity
during prime time by controlling source diversity (number of program producers), the
FCC lacked in monitoring content diversity in relation to source diversity and “provided
no information to alleviate this skepticism” (Napoli, 1999a, p. 17).
Current Diversity Issues and Policy Concerns
The analysis of diversity policies tells that the FCC’s effort in promoting content
diversity through controlling source diversity faces significant challenges. One major
challenge for justifying regulatory policy when market failure occurs is to establish
consistent public interest standards in terms of media diversity. The inconsistency of
establishing public interest criteria hinders not only on defining what constitutes media
diversity, but also implementing adequate policies on media diversity. Consequently,
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ineffectiveness of polices focusing on source diversity does not satisfy the ultimate
diversity goal, which is achieving content diversity.
The diversity policy goal that focuses on source diversity to shape content was a
direct corollary of the First Amendment conflict, which restricts the states from directly
regulating content. Regarding source diversity, the policies on multiple station ownership
are considered failing in achieving their objectives, which was demonstrated by the result
of increasing group ownership where independent stations tended to be owned by major
station groups. Likewise, the rationale for the syndication rules along with prime time
rules were convoluted due to contradictory measurements in evaluating the policies in
spite of their success in encouraging the competition of independent producers. More
specifically, according to the critics, the ineffectiveness of the policies can be contributed
to the FCC’s attempt to measure source diversity by plurality of ownership (including
both content and outlet ownership) rather than market power, and failure of monitoring
content diversity in terms of source diversity. The FCC’s focus on increasing the number
of media outlets to promote diversity is reflected in the CRS Report for Congress (2006):
The FCC doesn’t intend to apply the Diversity Index to any specific proposed
change in media ownership. Rather, it used the Diversity Index (calculated for
sample markets by assuming that each media outlet within the same media
category, for example, television stations, has the same “diversity market share”)
as the basis for setting the maximum number (or combination) of media outlets
that any provider could own in a market. A proposed media merger then would be
approved or disapproved based on the number (or combination) of media outlets
102
the post-merger company would have in the market, regardless of its actual postmerger diversity market share. (CRS 13)
This statement implies that the FCC ignores existing market power, heavily relying on
the number of media outlets in applying diversity polices on source diversity. At this
juncture, Glasser’s (1984) distinguishing the term “variety” from “diversity” is very
useful in understanding the difference between plurality and diversity. The variety only
concerns the number of outlets whereas diversity concerns both choice of content and
differences between them in terms of content and ownership characteristics (quoted in
Napoli, 1999a). Of course, a certain degree of variety is critical and required to create
diversity, but the concern for variety is not the same concern for creating diversity. What
this implies is that when determining policy objectives, the government should take into
consideration market power based on the existing market share, not mere consolidation,
for effective monitoring of the relationship between source and content diversity.
Moreover, the assessment of the effectiveness of policy further convoluted from
divergent policy goals stemmed from either political or economic goals that measure the
effectiveness of the policy differently. Theoretically, when economic goals are
emphasized, deregulation should be favored to increase competition, thus increasing the
number of channels would be the primary goals. On the other hand, when political goals
are emphasized, regulation is needed to insure the quality of content (socially desirable)
and that the concentration of market power would not hinder such a goal. The divergent
approaches to the policy goals raise the critical question as to what media’s role actually
is, and what the state’s role should be in considering the democratic function of media.
This concern indeed necessitates establishing a firm public interest standard with a
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revision of the First Amendment of the constitution. Media as a private corporation
should be distinguished from civil society; therefore, the state’s role which is viewed as a
coercive obstacle to democracy, should be reinterpreted as necessary to protect citizens
from corporate media by assuring citizens’ rights to access and to receive diverse and
socially/culturally desirable content. Therefore, as far as the state’s role is concerned in
protecting public interest (promoting media diversity), the focus is not the hands off
position of the state, but the degree of regulation, and effectiveness of the specific
policies.
Correspondingly, the media diversity scholars have questioned whether various
channels will provide a great range of choices for viewers. That is the inquiry of how the
FCC’s polices on source diversity (particularly focusing on the plurality aspect of
ownership of content and outlet) has an impact on content diversity. However, it might be
possible that a great number of program producers and outlets can produce a paucity of
voice when the quality of programming is not guaranteed. More importantly, the question
is whether serious concentration in the media industry under the deregulation climate,
and their economic power, will influence content diversity. Concerning the current
deregulatory climate, particularly from the elimination of the financial interest and
syndication rules, Croteau’s (2003) remarks on Federal Communications Commission
Broadcast Ownership EN BANC: Richmond, Virginia provide the empirical evidence
from the studies that indicate public interests and diversity are not served by a
concentration of ownership:
The broadcast networks owning nearly 80% of their prime-time programming—
four times as much as they did when the rules were in place. This has clearly
104
discouraged the development of programming from multiple, independent
producers. The Project for Excellence in Journalism has recently released the
most comprehensive study of its kind finding, among other things, that smaller
TV station groups tend to produce higher quality newscasts than stations owned
by larger companies, thus contradicting the claim that the deep-pockets of major
conglomerates inevitably help news and public affairs. They present nuanced data
and conclude that “regulatory changes that encourage heavy concentration of
ownership in local television by a few large corporations will erode the quality of
news Americans receive. (p. 2)
These empirical evidences in terms of the elimination of syndication rules along with the
deregulatory climate question the direction of the diversity policies on ownership
concentration. Parallel to the old concern, the Golden Age of television three broadcast
networks (ABC, CBS, & NBC) produced the sameness (Blevins, 2002), Khan (2003) also
provides a concern for the current concentration of the broadcasting industry where five
media companies, General Electric (NBC), Viacom (owner of CBS), Corporation News
(FOX), Disney (ABC), and AOL Time Warner control approximately a 75 percent share
of production of prime time viewing (see Table 4.6 for big four TV groups and stations
holding).
Table 4.6
Four Major TV groups and Corporations in Broadcast in 2005
TV group
Owned by
No. Affiliates
CBS
NBC
FOX
ABC
Viacom
General Electric
News Corporation
Walt Disney
200
230
200
225
No. Stations
owned
39
29
35
10
Source. Data compiled from Broadcasting & Cable (2006), & CorpWatch
Revenues
(in Billion)
4.67
3.9
2.62
3.91
105
Much effort in protecting public interest and current debates on ownership rules
have been about the best way to promote media diversity. Nevertheless, the current
ownership rules raised critical questions on what policy goals should be, and how
adequate policy implementation should be made. In an economic realm, the inquiry of
policy goals and their effectiveness underlies whether relying on general competition
laws will prevent further concentration, second consideration of specific rules along with
the rigorous investigations of different market conditions, and third determining key
factors that influence market behavior in creating media diversity. In the political realm,
the inquiry of policy goals and effectiveness underlies whether antitrust policy on media
diversity can actually achieve the ultimate goal, content diversity. The arbitrary and
capricious ownership rules should be resolved by the FCC’s effort to establish public
interest criteria and demonstrate the critical relationship between source diversity and
content diversity by continual monitoring of the policy effects on content diversity.
Addressing the concern for content diversity, the justification for the need of content
control might be possible by increasing the effectiveness of the policies. This suggestion
comes from voiding the critical relationship between source diversity and content
diversity and from the belief that the policy objective of increasing source diversity will
not guarantee content diversity. This suggestion, however, seriously conflicts with the
First Amendment right, and critical rationale for content control must be proven to be
effective.
Whether the diversity policies focus on political or economic goals, the major
issues on the current policy tend to emphasize the significance of content diversity.
Content diversity, in fact, extends its meaning to reflecting both open diversity (i.e.,
106
quality content) and reflective diversity (i.e., audience demand), and how source
diversity, both plurality and marker inequality of ownership, would affect overall media
content in different media market conditions. The next chapter will assess content
diversity applying the criteria of both open (normative dimension of content diversity
with an emphasis on the political and cultural function of media) and reflective diversity
(expressive dimension of content diversity with an emphasis on the economic function of
media) discretely in commercial and public television broadcasting; that is taking the
consideration of concentration impact (both pluralistic sources and outlets, and market
share) into different broadcast market conditions to measure media content with supply
and demand viewpoints.
107
CHAPTER 5
MEASURING DIVERSITY
The Structure of Broadcast Television Networks
The political economy perspective, in striving to promote media diversity, often
attempts to provide the need for a connection between media economics and normative
concerns (Gomery, 1993). With a concern for how market structure (i.e., monopoly,
oligopoly, etc.) influences corporate conduct, this perspective takes corporate ownership
as one part of the analysis. Consistent with the assumption of political economy studies,
this chapter examines the structure of the television industry and analyzes how the
particular market structure of television broadcasting influences media conduct in terms
of media diversity. The supply viewpoint, including both concentration (based on market
share) and competition (plurality of outlets) in U.S. broadcast television (commercial and
public broadcasting) is measured in relation to effects on content diversity; yet at the
same time, media supply of content which matches audience demands is additionally
measured to reflect the demand viewpoint that has been largely absent in media diversity
assessment of content diversity. The analyses follow the assumptions guided by the
proposed theoretical framework discussed in Chapter 3. These are 1) due to its obligation
to serve the public interest, public television would aim to contribute more to Open
Diversity than commercial broadcast television (public policy model), 2) commercial
broadcast television would maximize audience preferences, but the decline of the
audience size as a result of increased channels would motivate the broadcaster to
duplicate content for cost effective strategies (program choice model), 3) in general,
market concentration in the broadcast television industry would hinder promoting
diversity in program content; yet the heterogeneous oligopoly structure would promote
108
diversity in program content whereas the homogenous oligopoly structure would hinder
diversity (SCP model proposed by Scherer, 1996).
Networks and Distribution System
The discussed principal areas of multiple station ownership and financial
interests, along with prime-time access, traditionally governed by the FCC, are closely
related to the network issues on a system of distribution (see Chapter 4). In the 1980s,
with changes in the laws regarding sale (transfer) of broadcast stations, individual
television stations became subjects to be sold and changed hands more often than before
(Blumenthal & Goodenough, 1994). The introduction of a new television network, FOX,
built by an acquisition of independent stations was the result of such entrepreneurship. By
the mid 1990s, many network affiliates (local stations carrying network programming) in
the markets had been sold or traded due to the changes in regulations on the percentage of
audiences that could be reached and on cross media ownership. The changes in the
distribution system closely relates to the development of commercial network television
that supplies a schedule of programming to television stations owned by and affiliated
with the network.
U.S. television networks were mainly composed of three national networks, NBC
(National Broadcasting Company), CBS (Columbia Broadcasting System), and ABC
(American Broadcasting Company). Today, more than 20 national networks exist, along
with network affiliates, independent stations (without network affiliation), and public
television stations (PBS: non commercial national broadcasting network). Notably, FOX,
MyNetwork TV, and The CW (formerly UPN and WB) are today often considered major
networks along with the three traditional major networks. The national distribution of
109
television programming is the broadcast network where station groups own the affiliates.
The networks usually function to transmit programming and then distribute it to affiliates
by reducing the cost of programming to an individual station. Without networks, a station
could take two possible processes, producing its own, or buying programming, depending
on an individual station’s capability of producing programming. Either way, without the
networks, the cost to produce quality programs (e.g., those that have the potential mass
appeal to attract large audiences backed by superior financial resources) is enormous.
Thus, the individual station often compensates for the burdensome cost of programming
with the majority of its advertising income during the hours of programs produced by the
networks, in order to sell it to national advertisers (Einstein, 2004a). This implies that
independent stations would have to pay much higher programming costs than the
affiliates. Consequently, this might result in the station buying cheap (or usually low
quality) programming to reduce its average cost of programming. In this way, the
network powers with their superior financial resources can be a barrier to the independent
station, which may hinder effective competition. This economic perspective works to the
advantage of the network system grounded in efficient program distribution. Many of the
debated inquiries in terms of media diversity stem from the networks’ significant control
over their distribution to the commercial networks, whose major role is to serve mass
audiences for the advertisers while maximizing profits. Put simply, the debated inquires
of media diversity stem from the fear that the “public” can be manipulated by a handful
of executives in a few network corporations who compete intensely for “advertising
dollars” rather than “programming content.” This study is not an exception; it is in part to
demonstrate how market forces influence program content in the broadcast television
110
industry. Yet it extends the analysis by distinguishing the nature of public and
commercial broadcast television. This attempt is to answer whether the presence of
public television can be a significant alternative in preventing the decline of diversity.
Diversity in Public Television
Development of Public Television
The advent of non-commercial television can be traced back to 1953 when KUHF
went on the air. The view of non-commercial television as an educational concept was
reformed as public television within the Public Broadcasting Act of 1967. The
establishment of the new public television manifested its service to an “improved form of
instructional television” during the day, and “high quality” general interest programs in
the evening (Blumenthal & Goodenough, 1998). The existing non-commercial stations
were also recommended to join a network supported by federal funds at the beginning of
the development of public television.
The Corporation for Public Broadcasting (CPB) was created by the Act of 1967,
by which the Public Broadcasting Service (PBS) was developed. With a closer
relationship between the federal government and public television, CPB has the
responsibilities for encouraging diverse program suppliers and sustaining a high quality
of program standards. The basic duties of the CPB to ensure these standards are as
follows: “reporting on controversial topics, interconnecting stations in a network that
allows stations to program and schedule in accordance with local desires, nurturing new
station development, conducting research and training, and operating a program archive”
(Blumenthal & Goodenough, 1998, p. 47). The CPB, with the responsibilities listed
111
above, is the primary funding source for public television programming in the subject
areas of news, public affairs, cultural and children’s programs, drama, and arts.
A public corporation in the media industry is nonprofit with nonpolitical
characteristics, which implies an ideal form for media, unrestrained by political and
economic forces in performing its democratic functions. Unlike the commercial
television broadcast networks, in which advertising influences the affiliates in exchange
for local programming, public broadcast programming is somewhat aloof from these
economic forces. Such functions of public television explain why media scholars propose
the presence of public broadcasting as a solution in promoting the quality dimension of
media diversity. The nonprofit and nonpolitical nature of the corporation is clearly stated
in the Public Broadcasting Act of 1967 under Sec.396. Corporation for Public
Broadcasting:
(1) The Corporation shall have no power to issue any shares of stock, or to declare
or pay any dividends. (2) No part of the income or assets of the Corporation shall
inure to the benefit of any director, officer, employee, or any other individual
except as salary or reasonable compensation for services. (3) The Corporation
may not contribute to or otherwise support any political party or candidate for
elective public office. (p. 3)
With the goal of serving the public interest and the nonprofit and nonpolitical nature, the
underlying assumption is that public broadcasters provide positive externalities that are
not effectively retained by the traditional economic model (Napoli, 2004). Public
broadcasters have specific duties to provide minimum proportions of cultural and
informative programs and to serve citizens with high quality programs at prime time
112
(Brown, 1996; Van der Wurff, 2004b). Therefore, it was anticipated that public broadcast
television would offer informative, distinctive, and innovative content, which in turn
would contribute to Open Diversity (see Chapter 3 for the concept of Open Diversity).
Thus, the presence of public broadcasters could prevent the emergence of excessive
competition for price that reduces the quality of content in low cost strategies of
programming (see Chapter 2 for a detailed explanation of ruinous competition, in which
media compete not for content but for price).
The Impact of Policy Preferences on Ownership Structure
In public broadcasting as a public organization, changes in the ownership
structure are mainly determined by product of policies that mandate to serve the public
interest, convenience, and societal needs. In fact, “Congress acted as though the small
sums appropriated to CPB funding gave Congress the right to dictate content” (Sterling &
Kittross, 2002, p. 631). This obligation manifests itself in public broadcasting’s close
relationship with policy goals to achieve diversity in programming. Therefore, policy
preference can be a critical element for determining product decisions. The idea that the
product is somewhat detached from the commercial purpose that uses audience
consumption as an advertiser support mechanism explains that public broadcasting is
somewhat free from external market forces in producing media content. As Blumenthal
and Goodenough (1998) state, public television is non-commercial, so audience ratings
do not guide programming decisions. This fact is critical in analyzing media diversity
because the market force has been considered a major hindrance in promoting media
diversity. Analyzing the significance of ownership structure of public television,
therefore, entails changes in policy preferences, not consumer preferences.
113
During 1963-1968, under the Johnson administration, the Public Broadcasting
Service (PBS) was developed by the CPB to distribute national programs through the
system. PBS thus functions like a network, yet it doesn’t own stations. With the passage
of the Public Broadcast Act of 1967, public broadcasting licensees were charged to
encourage programming which would be responsive to the interests of people, which
constitutes an expression of diversity and excellence (Public Broadcasting Act, 1967).
The policy goal of the act is to mandate that each public broadcasting license sustains to
serve the public interest, convenience, and necessity (Lashley, 1992). Since the
enactment of the 1967 act, the number of public stations has greatly increased (see Figure
5.1 for the increase of public television channels).
Figure 5.1
Public Television Channels. 1960-1980
Public Television Stations
300
241
250
200
200
252
266
277
213
180
150
126
101
100
75
51
50
0
1960 1962 1964 1966 1968 1970 1972 1974 1976 1978 1980
Source. Data compiled from Status report on public television (1973) & FCC records.
114
Figure 5.1 shows a noticeable increase between the years of 1966 and 1968, where the
number of television stations jumped from 126 to 180 with a steady increase in the
subsequent years. This demonstrates the effect of the 1967 act on source diversity
(number of stations) in public television. Along with the increasing numbers of public
stations, during the Johnson era, public television, in fact, had significant achievements in
programming that provided substantial, innovative, educational, scientific and cultural
programs, which are absent from commercial broadcasting. For example, The Great
American Dream Machine, Washington Week in Review, Sesame Street, Soul and Black
Journal, and Nova were examples of fulfilling the mission of programming that meets the
quality dimension of diversity listed above. Some of the programs developed during this
era still continue today. Public television in this sense has become an informational,
educational, and cultural forum through which adults and children are educated, and
audiences are culturally informed.
However, public television has undergone fundamental changes in its
organization and programming, along with the policy shift from the Johnson to the Nixon
administration. Their production and distribution of controversial news and public affairs
programming was recognized as irresponsible journalism, departing from the concept of
localism and diversity, and the programs critical of government performance were
“judged to be anti-administration by the Nixon’s White House” (Lashley, 1992, p. 781).
Consequently, increased and long term federal funding for the CPB was difficult to
anticipate. Moreover, continual funding cuts in the 1980s by the subsequent
administrations of Reagan and the first Bush eventually diminished federal support for
public television, which had been the major province of the CPB.
115
Table 5.1 represents federal government funding for public broadcasting from 1970 to
2000. The table illustrates the heavy cuts of federal funding for public broadcasting right
after 1980 from 27 % to 16 %. This reduction hasn’t been restored in subsequent years.
Table 5.1
Federal Government Funding for Public Broadcasting Revenue. 1970-2000
Year
% Federal Gov
1970
1975
1980
1985
1990
1995
2000
15
25
27
16
17
18
16
$ Total from Federal Gov
(in millions)
23
93
190
175
269
345
352
Constant dollars
(in millions)
122
355
473
334
422
465
420
Source. Data compiled from Corporation for Public Broadcasting, published in Stay
Tuned (Sterling & Kittross, 2002), & CPB annual reports.
In looking at Table 5.2, the current funding sources of public television from 2000 to
2005 are largely from non-federal sources, including local and state governments,
universities and colleges, business and industries, foundations, auctions, and so on; which
make up an average of 80%. What this means is that their funding sources are restricted
and long term funding is not secured by government support, in which public television
would be vulnerable to political influence in decision making. Such funding restrictions
caused public television to seek funding from commercial firms, which in turn diminishes
the distinction between public and commercial broadcasting.
116
Table 5.2
Public Broadcasting Revenue by Public Television. 1999-2000
Source of Revenue
Federal
CPB
Federal Grants
Non Federal
Local/States Gov
Colleges & Universities
Foundations
Auctions
Business/Industries
All others
2000
%
16.4
13.9
2.5
83.6
21.5
8.4
5.5
0.9
39.6
7.7
2001
%
17.9
15.4
2.6
82.1
21.5
8.4
6.1
0.7
37.2
8.2
2002
%
18.8
16.1
3.4
81.2
21.0
9.6
6.4
0.7
38.3
5.2
2003
%
20.7
16.8
5.3
79.3
21.5
8.8
7.8
0.6
36.0
4.6
2004
%
21.2
17.4
3.8
78.8
20.3
9
7.1
0.7
36.6
5.1
2005
%
21.9
12.4
3.7
78.1
21.4
8.4
6.7
0.6
36.2
4.7
Source. Corporation for Public Broadcasting annual reports
As shown in Table 5.2, large amount of funding is from business and industry sources.
This condition critically questions whether public television, attacked by commercial
interruption, has influence on program content.
The policy preferences of the Nixon administration that perceived news/public
affair programs on public television as biased and irresponsible journalism in fact
initiated the decentralization of the network power while strengthening the individual
station. In this way, public television became a membership organization where programs
are mostly produced by member stations.
Table 5.3 represents public television producers and distributors from 1974 to
1996. The data suggests a general tendency of a decentralized system of production while
maintaining a highly centralized system of distribution. A closer inspection of the data
indicates that the decentralized system of production is substantiated by a decline of
producers from public sources, from 45% to 35 % during 1974 –1996.
117
Table 5.3
Public Television Producers and Distributors. 1974-1996
Item
1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996
Producer
Local
100
100
100
100
100
100
100
100
100
100
100
100
11
10
8
7
7
6
5
5
5
4
5
5
Public TV
45
48
52
46
46
44
38
27
32
31
33
36
U.S. Coproduct
3
2
2
3
3
3
3
10
10
6
6
6
Children's TV
Workshop
22
19
17
17
16
16
29
16
15
14
12
9
Independent
6
6
5
8
11
9
5 (1)
19
19
25
26
27
Foreign
Coproduct
6
8
9
13
10
13
15
14
12
11
10
10
Commercial
2
3
3
3
4
3
6
4
4
5
5
4
Other
5
5
4
4
4
5
4
4
3
4
4
4
100
100
100
100
100
100
100
100
100
100
100
100
Local
11
10
7
7
6
6
5
6
6
5
4
5
PBS
62
69
72
70
67
65
64
62
59
63
63
63
Regional public
10
6
5
8
11
13
14
18
24
23
23
25
Other
17
15
16
16
16
16
17
14
11
9
9
8
Distributor
Source. Corporation for Public Broadcasting, published in U.S Census
Note. (I). Independent producer included with Children's TV Workshop for 1986.
The sharp decline of producers from public sources after 1978 from 52% to 46 %, with a
great increase of foreign producers from 9% to 13% is in part due to the effect of The
Public Broadcasting Telecommunications Financing Act (1978) under the Carter
administration. The act emphasizes public broadcasting’s diversity mission, allocating
funding for source diversity of the work force, in which facilities are available to be
operated and owned by minorities. The noticeable increase of independent producers in
1988, from 5 to 19 percent, could be the corollary of the Public Broadcasting
Telecommunications Financing Act (1988). With the passage of the Act, Congress
removed programming from the discretion of the corporation’s internal budget and
118
approved additional direct line-item allocations to independent producers. Therefore, a
new entity, the Independent Production Service (IPS), and Minority Programming
Consortia (MPC) were authorized to award grants directly to smaller independent and
minority producers. The IPS was encouraged to produce programs by minorities as well
as innovative and diverse programming geared to the child as well as adult audiences. In
spite of a tendency of a decentralized system of production in public television, the
system of distribution appears to be highly centralized which is evidenced by a high
proportion of public broadcast services in distribution that take up over a 60% average
over years. This tells the fact that PBS still maintains a major role in distributing
programs to public television stations.
The Impact of Policy Preferences on Program Content
The policy preferences not only decentralized the role of the CPB, but also
modified the program content in public television. The impact of the policy preference on
content programming can be closely related to the government’s funding for this type of
programming in public television. For example, Nixon discontinued funding for public
affairs programming after 1972 when news and public affairs programs were judged to be
too critical of government performance by the Nixon’s White House. This resulted in the
mandate for public television to promote objectivity and fairness and program
modification in all public affairs programming. Moreover, Reagan’s funding cut for
children’s categories resulted in a program content change (see Table 5.4 for public
television content changes).
119
Table 5.4
Public Television Programming Content by Categories
General
Year
1964
1966
1968
1970
1972
1974
1976
1978
1980
1982
1984
1986
1988
1990
1992
1994
1996
News/
Information/
Public affair
Skills
13
13
14
18
19
13
12
11
12
12
14
16
16
18
17
19
19
Na
Na
Na
Na
Na
16
20
24
23
25
26
30
32
32
29
27
29
Instructional
Sesame
Street
Children
10
10
10
20
21
11
10
9
9
8
8
7
6
6
15
20
20
21
18
16
16
15
15
11
12
11
11
9
8
Youth/
Children
Adult
41
34
42
32
25
5
9
8
5
4
17
17
15
1
1
1
14
13
12
15
16
14
12
9
8
3
3
3
Source. Data compiled from Corporation for Public Broadcasting, published in U.S
Census on Allcountries, & Stay Tuned (Sterling & Kittross, 2002).
Table 5.4 illustrates that from 1972 to 1974, News and Public affairs programs
greatly declined after 1972, from 19 % to 13 %, and remained at a low percentage until
1986. However, programs such as Information and Skills have proliferated since 1974,
showing continual growth from 16% to 29%. The reason for the increase of Information
and Skills programs, along with a decrease of News and Public Affairs programs, relates
to the particular policy in which public television has continued to broadcast politically
neutral programs that are safe, not to be judged as irrational journalism in response to the
mandate for promoting objectivity and fairness. Likewise, the overall children’s
120
programming, including General Children, Sesame Street, and Instructional Children, has
declined steadily. General Children programming fell from 11 % to 6 % during 19741990, Sesame Street dropped from 21% to 8 % during 1974-1996, and the overall
tendency of Instructional Children programming declined. The overall decline of
children’s programming also suggests the changes in content, largely influenced by
Regan’s budget cuts in the children category, which also caused the cease of the Sesame
Street production altogether in 1981.
Measuring Concentration of Suppliers and Program Content Diversity
Closer inspection of the impact of political preferences on ownership structure
and program content suggests a further analysis of the relationship between the
concentration of suppliers and program content in order to examine the overall diversity
of public television. For that purpose, the Herfindahl Index (HHI) was computed to
measure the concentration of producers and distributors, and Open Diversity (OD) was
computed for program content diversity in public television. The higher HHI represents a
higher concentration of producers and distributors, thus less diversity of suppliers. Higher
OD represents higher content diversity. Although many methods for measuring “content
diversity” are available, including probability, logarithm, and rank based measures (see
McDonald, 2003 for diversity measurement), computing OD is especially beneficial
because it accounts for both time proportion and numbers of program content, measuring
the variance of individual program content by subtracting each from the norm of all
categories. In this way, it can effectively reflect not only the number and size distribution
of a type of program content, but also individual variance of each category. Reflective
Diversity (RD) wasn’t computed for public television diversity, following the assumption
121
that programming decisions of public television are not guided by audience ratings due to
its non-commercial nature (Blumenthal & Goodenough, 1996). Thus, public television
programming content shouldn’t be slanted to benefit commercial interests. More
importantly, in the public television realm, public interest motivation defines diversity to
be a normative standard of quality (see Open Diversity and public policy model in
Chapter 3). In other words, the assumption is that public television programming need
not pursue a large audience at whatever cost to programming, but should serve an
audience that would be neglected (or underrepresented) otherwise. In this effort, the
audience is defined, not by consumers whose demands are influenced by advertiser
support mechanisms, but by citizens whose viewpoints are based on rational decisions
and thus are suited to the top down approach in defining diversity.
The initial code for the program categories was borrowed from the previously
established categories provided by the CPB, which includes News/Public affairs,
Information/Skill, Cultural, Children/Youth (general), Sesame Street, Others, Youth
(instructional), and Adult (instructional). These categories are then collapsed to a list of
seven categories: 1) News/Public affairs, 2) Information/Skill, 3) Cultural, 4)
Children/Youth, 5) Sesame Street, 6) Others, and 7) Instructional.
Figure 5.2 provides an illustration of the overall concentration of distributors and
producers and Open Diversity in public television over some years. A visual examination
of these figures suggests changes in the concentration of distributors and producers. In
general, overall concentration of producers has maintained a much lower level, ranging
from 0.23 to 0.32 than those of distributors.
122
Figure 5.2
Diversity Index of Producer, Distributor, and Program Content in Public Television
Content OD
Producer HHI
Distributor HHI
1.00
0.90
0.85
0.83
0.82
0.83
0.81
0.83
0.80
0.77
0.80
0.76
0.76
0.75
0.74
0.70
0.55
0.60
0.50
0.51
0.49
0.44
0.40
0.30
0.53
0.27
0.29
0.47
0.46
0.44
0.46
0.46
0.47
0.24
0.23
1994
1996
0.42
0.32
0.27
0.27
0.25
0.24
0.17
0.20
0.19
0.20
1990
1992
0.10
0.00
1974
1976
1978
1980
1982
1984
1986
1988
This suggests that the system of program producers is much more decentralized than
those of distributors in public television. As analyzed earlier, a lower concentration of
producers verifies the impact of the policy goals that attempt to decentralize network
power by strengthening individual stations. Hence, programs are mostly produced by
member stations, other domestic and international broadcasters, and independent
producers. On the other hand, the overall system of distributors is highly concentrated,
ranging from 0.44 to 0.56 over years. This illustrates a centralized distribution system
where PBS takes the role of the foremost distributor.
However, both, in spite of the different levels of concentration, show a similar
pattern, indicating a strong positive relationship between them. The concentration of both
greatly increased from 1974 to1978, showing the tendency of the centralized system, yet
123
then declined steadily until 1988. The only difference was right after 1988 when the
concentration of distributors and producers went to opposite direction. Not only are the
patterns similar to each other, but also the degree of change is very similar, demonstrating
the strong relationship between the concentration of distributors and producers in public
television. On the other hand, the average of content diversity has maintained a high level
with less fluctuation (the range between the minimum and maximum of OD is 0-1)
although the concentration of producers and distributors has oscillated greatly. In general,
the irregular patterns of the relationship between the concentration of suppliers and the
OD weaken the assumption that the concentration of suppliers has an impact on program
diversity. For example, the overall system of diversity appears to decline from 1974 to
1978, a time period coinciding with an increase in the concentration of both producers
and distributors. However, while the overall concentration of both producers and
distributors began a downward trend during 1978-1988, the OD level also appears to be
in a decline during the same period, except in 1984. Thus, the analysis leads to an
interpretation that the concentration of suppliers in public television doesn’t seem to have
an impact on the diversity of program content due to the irregular relationship between
them. This explains that the ownership structure in public television is not a major
determinant in shaping program content diversity.
The weak relationship between the concentration of ownership structure (both
distribution and production systems) and content diversity can be interpreted as first, a
monopolistic distribution system in public television doesn’t involve an economic
competitive environment simply because there is lack of motives to introduce economic
considerations into the programming policy. Unlike commercial networks that have great
124
control over programming, PBS (a major distributor) doesn’t get deeply involved
programming decisions, but ensures that the stations follow the guidance for a general
policy (Blumenthal & Goodenough, 1998). Second, public television programming,
following the national standards of the common carriages demanded by the policy, helps
public television maintain high OD in spite of the fluctuation of ownership concentration.
It is true that public television as to serve public interests, the policy demands that a
certain proportion of educational and children programs are included. Another reason for
maintaining high OD can be in part attributed to the decentralized system of production
that reflects localism, which is evident from the low concentration level of producers. In
this way, PBS, as a main distributor, distributes programs variously produced by member
stations. In other words, the weak relation between ownership concentration and content
diversity in public television explains the ineffectiveness of the economic model in public
television where market competitiveness is largely ignored by the public interest
obligation due to its noncommercialism. Particular attention needs to be paid, however, to
the overall tendency of content diversity to decline over the years from 0.85 to 0.74
although the average OD level is high. This suggests a critical need for a continual study
of content diversity in public television to determine whether the decline is significant in
more current years, and what possible indicators contribute to such a decline.
In sum, the analysis of public television diversity substantiates the initial
assumption that public television can contribute to Open Diversity with the evidences of
the type of program content it provides, decentralized system of production, and level of
OD which has remained high over the years. The programs offered by public television
are mostly informational, educational, cultural, and instructional, which defines the
125
concept of a television broadcast as a public good (see the categories of program content
examined above). Public television content, distinct from mostly entertainment content
offered by commercial broadcasters, at least provides a possibility for public television to
fulfill diversity goals. Moreover, station scheduling autonomy is apparent in the public
television production system. As the analysis demonstrates, PBS has limited capacity to
control program scheduling produced by stations. Such a decentralized system of
production implies that public television could fulfill a principle of localism on the basis
of community service. In addition, regardless of the changes in concentration levels of
producers and distributors, the average OD level appears to be high, ranging from O.74
as the lowest, to 0.85 as the highest. Therefore, the presence of public broadcasters may
function to prevent the decline of the quality dimension of diversity due to their moral
obligation to serve public interest. Their providing more diversity, a bias toward high
quality, elitist programming, as opposed to commercial channels, is further substantiated
comparatively by the analysis of commercial broadcast television.
Diversity in Commercial Broadcast Television
The large commercial television networks in the U.S. broadcasting industry are
NBC, CBS, and ABC, with three newer networks, FOX, PAX, UPN, and WB (now UPN
and WB become MyNetwork TV, and The CW). The operations of NBC, CBS, and ABC
are nearly identical, organized along similar lines through specific purpose, procedures,
and structures (Blumenthal & Goodenough, 1998). These networks share a primary goal
with other commercial entities, supplying the largest possible mass audiences to the
advertisers; therefore, they increase revenue from advertising and ensure funding for the
program. Fox, UNP, and WB, however, differ from these three networks in that they
126
were built by accumulating unaffiliated independent stations. None of these networks has
yet offered the same full range of programs as NBC, CBS, and ABC although FOX is
now considered a major network along with NBC, CBS, and ABC. The addition of a
fourth network to the three traditional ones explains a general tendency of increased
competition in the oligopoly of the broadcast television industry. Nevertheless, whether
such changes in the oligopoly structure from new competitors would enhance program
diversity in commercial broadcast television still remains one of the major questions.
Advertiser Support Mechanism and Market Concentration
Concerning the impact of market force on media diversity, the major issue
regarding commercial television networks stems from the real product of these networks,
which is mainly the “audiences,” not the “program,” in which the networks increase
profits by providing the largest possible number of viewers desirable to advertisers.
The possible implication of the adviser-supported mechanism may be a distortion of the
market where viewers’ choices are limited. The simple economic formula in the
broadcasting television market is that more desirable viewers generate higher advertising
rates. This economic perspective suggests an alternative to the assumption that a
heterogeneous oligopoly enhances diversity; that is, a prediction that the reduction of
audience size caused by increased competition may turn networks to cost effective
strategies, thus duplicating programs.
Each broadcast network supplies its own stations and affiliates with a regular
schedule, which is divided into primetime programming (8:00 to 11:00 pm), daytime
programming (1:00-4:30 pm), early evening news (6:00 to 7:00 pm), and late evening
programming. Primetime programming is particularly more expensive than the others
127
simply due to its great potential in generating advertising dollars based on the CPM (the
cost of advertising per thousands of potential customers or a certain demographic). The
key factor determining advertising price is audience ratings and marketplace, in which
advertisers pay for a commercial according to the rating multiplied by the CPM.
According to Nielsen Media Research (2006), total advertising supported broadcast
accounts for 348 of the top 349 programs among households during the 2005-2006
television season, delivering a combined 34.5 primetime HH rating over the season. This
report demonstrates that broadcast dominated the primetime program rankings due to the
ability of TV networks to locally insert ads. The highest average cost of a prime time
show compared to the others explains the logic of the networks competing for advertising
revenues. See Figure 5.3 for network television cost.
Figure 5.3
Network Television Cost: (Cost per 30 sec). Constant Dollar Base (2007)
day time
prime time
early evening
late evening
200,000
180,000
160,000
140,000
120,000
100,000
80,000
60,000
40,000
20,000
0
1975
1980
1985
1990
1995
2000
2005
Source: Nielson Media Research, February each year, published in Television Bureau of
Advertising. TVB Online.
128
Figure 5.3 represents average network cost per 30 sec for prime time, daytime, early
evening, and late evening, calculated on the current Constant Dollar base (the year of
2007). As the Figure demonstrates, the average cost of network television for primetime
has been much higher than those of daytime, early evening, and late evening, which
reflects the high cash value of the prime time. Overall, the gradual increases of the
average cost for prime time and early evening shows might be in part attributed to the
fundamental changes of the network distribution system, along with the FCC’s lifting of
several restrictions with the recognition of increased potential audiences in the television
industry in the early 1980s. However, the average cost for all these shows sharply
declined after the 1990s, which implies a decline in the advertising values in the
broadcast television networks. This is mainly due to diminishing audiences, caused by
more alternative forms of entertainment mediums (e.g., Videogames appeared on a TV
set, VCR, & a dozens of cable networks) available to audiences where broadcast network
ratings have been falling over the last two decades. The changes in network costs for the
programming demonstrate a general system of relationship among programming cost in a
particular time spot, advertising dollars, and audience rate. In general though, television
network costs are very high; however, the networks offer a centralized source for national
television advertising by distributing nationally (Einstein, 2004a). The networks’
monopoly on advertising largely ensures their profits from advertising revenue, with
accounting advertising as a primary revenue source.
As far as considering the influence of the networks on the commercial broadcast
television industry and media diversity, the network can “use their clout as program
providers and as station operators to force programming into the marketplace” (Einstein,
129
2004, p.119). In this way, commercial television networks became the gatekeepers for
both information and entertainment for the public with their ability to control “program
selection” primary program developers, with distribution as national program developers.
Measuring Market Concentration in Commercial Broadcast Television
The nature of the commercial broadcast television industry provides an insight
that changes in the ownership structure are largely determined by profitability In this
way, advertising revenue becomes a primary factor for analyzing the commercial
television industry and its impact on content diversity along with the size of affiliate
share. HHI is computed for measuring concentration of both the number of affiliate
shares and advertising revenue shares in the commercial television market. Figure 5.4
indicates the general structure of commercial television. The overall structure of
commercial television based on the number of affiliates appears to be highly
concentrated. However, a detailed analysis indicates that there is a sharp decline of the
concentration of affiliate shares in 1954, from HHI 0.46 to 0.34. This can be attributed in
part to the effect of the first comprehensive rules of multiple station ownership in 1953
(see Chapter 4 for a detailed explanation of this policy) in which the FCC set numerical
limits on station ownership. After 1956, the concentration steadily declined until 1985.
This steady decline of the concentration in terms of affiliate shares is also a continual
effort to restrict ownership by setting numerical limits of multiple stations that had
remained the same over almost three decades since 1954.
130
Figure 5.4.
Herfindahl Index: Concentration based on Number of Affiliates Share by Commercial
Television Broadcast Networks, and Non-Networks. 1950-1987
0.50
0.45
Network affiliates HHI
0.45
0.40
0.42
0.35
0.34
0.30
0.28
0.25
0.26
0.20
0.15
0.10
0.05
87
19
19
85
82
19
78
80
19
19
76
74
19
19
72
19
70
19
68
19
64
66
19
19
62
19
60
19
58
19
54
56
19
19
52
19
19
50
0.00
Source. Data compiled from FCC, and Sterling (1984), published in Stay Tuned (Sterling
& Kittross, 2002). FOX included from 1986.
However, the concentration after 1970 has remained at a similar level, and after 1983 it
has increased from 0.25 to 0.28 showing a tendency of increasing concentration. This
tendency can be in part caused by the deregulation policy; the institution of a six-year
transitional ownership of 12 television stations in 1984, and the expansion of the
numerical limits based on audiences reached in 1985. However, it is obvious that the
overall concentration level from 1950 to 1988 had declined, demonstrating the trend of
increasing competition over the years in the commercial broadcast television industry.
Not only was a decline of the concentration of number of affiliate shares apparent
between 1950 and 1988, but also in general, the level of concentration of advertising
revenue shares from programming declined from 1965 to 2003.
131
Figure 5.5 shows that the concentration of the market based on advertising
revenue has been steadily declining over the years, from 0.39 to 0.30. This suggests
increasing competition over time in the commercial broadcast television industry, mainly
due to a general decline of advertising revenue shares from networks with an increase of
advertising revenue shares from syndication and local spots.
Figure 5.5
Herfindahl Index: Concentration based on Advertising Revenue Share by Commercial
Broadcast Television. 1965-2003
0.45
Ad revenue share HHI
0.39
0.40
0.36
0.35
0.35
0.30
0.31
0.30
0.25
0.20
0.15
0.10
0.05
19
65
19
67
19
69
19
71
19
73
19
75
19
77
19
79
19
81
19
83
19
85
19
87
19
89
19
91
19
93
19
95
19
97
19
99
20
01
20
03
0.00
Figure 5.6 represents the detailed changing environment of commercial television
competition for the advertising revenue share of programming.
132
Figure 5.6
Advertising Revenue for Commercial Broadcast Television by %.
1965-2003
60
network
spot-national
spot-local
syndication
50
40
30
20
10
20
03
20
01
19
99
19
97
19
95
19
93
19
91
19
89
19
87
19
85
19
83
19
81
19
79
19
77
19
75
19
73
19
71
19
69
19
67
19
65
0
Source. Universal McCann, published in Television Bureau of Advertising. TVB Online.
As shown in Figure 5.6, the syndications and local spot television have shown a gradual
increase while the percentage of advertising revenue shares of the networks and national
spot television has declined. Particular attention needs to be paid here to the advertising
revenue from syndicated programs that are distributed to individual stations. As
explained in the previous chapter, the Prime Time Access Rule (PTAR), in conjunction
with Syndication Rules adopted in 1970, is closely related to the FCC’s effort to change
the television structure by paying attention to market potential (or financial interest) and
extends the policy’s focus on program suppliers (or producers). More specifically, it
attempted to break up the dominance of the three major networks, ABC, CBS, and NBC,
in program production. As Figure 5.6 demonstrates, the rules actually helped reduce the
133
network dominance in producing programming; that is, at least a reduction in the
networks’ advertising revenue share from network programs.
However, the decrease of the networks’ advertising share doesn’t necessarily lead
to a conclusion of an actual increase of independent producers (or program suppliers).
The decrease in advertising revenue of network programs seemingly explains the simple
economic relationships among program producers, networks, and local affiliates: As a
profit maximizing entity, commercial broadcast television will use programming
desirable to advertisers by having the potential to attract audiences. Put differently,
commercial television networks do not necessarily have an incentive in the production of
programming if acquiring programming from independent program producers provides
more profits. Whether a network produces programming within its internal system or
acquires it from independent programming producers depends on the motivation to
increase the value of audiences for advertising dollars; that is the network’s primary
concern for supplying programming on the basis of minimizing costs and maximizing
profits. The PTAR that attempts to increase opportunities for independent producers to
sell programming to the top 50 market network affiliates for prime time broadcasters is
based on such an assumption and seemed to work when networks’ revenue share
decreased, as is evident from Figure 5.4. However, this interpretation has limits in
analyzing the market power based on vertical integration, as well as the actual share of
programming from independent suppliers.
For a detailed analysis of the changes in network program suppliers (producers)
and whether the PTAR had an actual effect on the structure of independent producers, the
leading network suppliers during prime time in 1970, 1977, 1989, 1994, and 2002 were
134
analyzed. Because the data for total numbers wasn’t obtained for this study, CR4 and
CR8 are computed for measuring the concentration of programming share by suppliers
instead of using HHI. If the top four are higher than 50 percent, and the top eight are
higher than 75 percent, then the market is considered to be highly concentrated.
Table 5.5 shows the share of programming by prime time suppliers in the pre
PTAR year, 1970, and immediate post PTAR year (1977).
Table 5.5
Leading Network Suppliers: Prime Time. 1970 & 1977 Share of Programming
1700
Share of
Programming (%)
Universal
12.8
Twentieth-Century
7.3
Fox
Paramount
6.4
Columbia
6.1
MGM
4.5
Filmways
3.6
ITC
3.0
Harbour
2.6
Spelling/Thomas
2.3
Talent
2.2
Suppliers
Teleklew
CBS
Walt Disney
Leonard Freeman
NBC
Sullivan
Peekskill
Xandu
Van Bernard
2.0
1.9
1.9
1.8
1.8
1.8
1.7
1.7
1.5
Glendo
Total
CR4
CR8
1.5
68.4
32.6
46.3
Source. Federal Trade Commission (1995)
Suppliers
Universal
Warner
1977
Share of
Programming (%)
18.4
6.7
Spelling Goldberg
Lorimar
MTM
Columbia
MGM
Paramount
Aaron Spelling
Towntieth-Century
Fox
Walt Disney
Tandem
Quinn-Martin
Tat
Toy
CBS
Four D
Whacko
Schick-Sunn
Classics
David Gerber
Total
CR4
CR8
6.1
5.4
5.3
3.6
3.5
3.5
3.2
3.2
2.9
2.9
2.7
2.4
2.2
2.0
2.0
1.7
1.6
1.6
80.9
36.6
52.5
135
The CR4 and CR8 indicate a slight increase of concentration, from CR4 32.6 and CR8
46.3 in 1970, to CR4 36.6 and CR8 52.5 in 1977. Although the concentration level
increased right before and after the rule, there is an obvious indication of structural
change during these years. In 1970, before the PTAR, the major suppliers, such as
Universal, Twentieth-Century Fox, Paramount, and Columbia, held the top positions in
share of programming. This tendency, however, changed in 1977 when independents,
such as Spelling Goldberg, Lorimar, and MTM, moved up to higher positions in the top
twenty leading suppliers. More importantly, about 60 % of the top leading suppliers were
independent producers in 1977. This demonstrates the significant effect of PTAR that
attempted to increase independent producers in the immediate post PTAR year.
However, the programming share by suppliers has been even more concentrated
during the recent post PTAR years, 1989, 1994, and 2003 (see Table 5.6 for leading
network suppliers in 1989, 1994, & 2002). As Table 5.6 evidenced, the concentration has
rapidly increased, in which the CR4 and CR8 reached 73.5 and 84.8 in 2002 respectively.
The increasing concentration level substantiates the consolidating tendency among major
suppliers over independents. For example, in 1994, the ABC productions and ABC
sports, CBS Network productions, and NBC television mostly held the top positions in
sharing programming, taking up 42.59 percent among leading suppliers, and in 2002,
their collective shares were even higher, reaching 63.6 % of the whole prime time
programming share. While the concentration level has increased with the consolidation of
large firms, the share of independent suppliers has declined during these years due to the
vertical integration of these same large firms.
136
Table 5.6
Leading Network Suppliers: Prime Time. 1989, 1994, & 2002 Share of Programming
1989
Suppliers
Lorimar
CBS
1994
Programming
share (%)
2002
Programming
share (%)
Columbia
Universal
7.6
6.8
ABC
Warner
Brothers
CBS
NBC
Warner
Brothers
ABC
6.8
Universal
6.1
Disney
5.56
MGM
4.5
Paramount
4.5
Stephen J.
Cannel Prod
Disney/Tough
stone
20th Century
Fox
NBC
Viacom
4.3
20th Century
Fox
Columbia
Tristar
Alliance
2.3
1.5
Carsey
Werner
Cosgrove
Meurer
Paramount
Stephen
Bochco
Productions
Silverrman
Co./Viacom
Witt Thomas
Castle Rock
1.85
0.93
1.5
Mozark
0.93
1.5
0.93
0.8
Shukovaky
English
Entertainment
Spelling
0.8
Wind Dancer
0.93
CarseyWerner
New World
Castle Rock
Productions
Cosgrove/Mu
erer Prods
GTG
Productions
Alien
Productions
Steven
Brocho Prods
Total
CR4
CR8
12.9
7.6
Suppliers
3.8
3.8
3.0
3.0
3.0
86.1
34.56
56.8
Total
CR4
CR8
Suppliers
Programming
share (%)
17.59
14.81
CBS
ABC
28.0
21.2
13.89
11.11
14.4
9.9
11.11
NBC
Warner
Brothers
Universal
6.8
4.63
20th Century
Fox
Bochco Prod
1.5
1.5
3.70
Endemol Ent
1.5
1.85
Hallmark Ent
1.5
1.85
Next Ent
1.5
1.85
1.85
1.85
1.85
0.93
99.6
57.4
82.39
Total
CR4
CR8
Source. Data compiled from Federal Trade Commission (1995) & Einstein (2004)
87.8
73.5
84.8
137
As evident from Table 5.6, the extreme high concentration occurred between
1994 and 2003. This result can be attributed in part to the effect of the 1996
Telecommunication Act that allowed vertical influence over production. It is true that
independent producers which used to produce no more than 15% of the prime time
programs a decade ago, are now controlled or owned by networks (Alexander et al.,
2004), in which, the independents become merged with the network to become a
vertically integrated corporation.
Measuring Program Content: Open and Reflective Diversity
In order to examine whether the changes in commercial television structure
analyzed above have actually had an influence on content programming, the program
content diversity supplied by the networks during prime time was analyzed. To measure
program content diversity, both Open Diversity (OD) and Reflective Diversity (RD) are
computed. As explained, when measuring public television diversity, the higher OD
represents higher diversity in the supply perspective. The higher RD, on the other hand,
represents a higher reflection of audience preferences on its media content. Unlike public
television, in the commercial broadcast television industry, audience rankings or
consumers’ choices are critical factors in shaping program content due to the advertisersupported mechanism. In that way RD is useful to analyze how program content reflects
audience choices. The network television prime time program types are analyzed in
response to the effects of the changing structure of commercial broadcast television. A
general program type scheme developed for commercial broadcast television diversity
was different from that of public television simply because they offer different content
types. However, to standardize D, the same number of program type categories between
138
public and commercial broadcast television was made for the comparison of overall OD
between them. The initial code for the commercial television program includes 21
categories: Special/Varied, Comedy, Country/Western, General talk, General drama,
Women’s serials, Actual adventure, Crime/Detective, Suspense, Western drama,
Animated cartoon, Movie, Situation comedy, Quiz/Panel, Newscasts, Forum/Interview,
Documentary, Children show, Sports, and Reality. These categories are then, collapsed to
7 categories; 1) Variety, 2) Drama, 3) Movie, 4) Situation Comedy, 5) Quiz/Panel, 6)
News/Information, and 7) Others (children, sport, & reality). The RD is calculated on the
basis of the 35 top-rated programs by audience, following the same categories used for
OD.
Figure 5.7
Open and Reflective Diversity in Commercial Broadcast Television. 1965-2002
1.00
OD
RD
0.90
0.80
0.70
0.60
0.50
0.40
0.30
0.20
0.10
20
01
19
99
19
97
19
95
19
93
19
91
19
89
19
87
19
85
19
83
19
81
19
79
19
77
19
75
19
73
19
71
19
69
19
67
19
65
0.00
139
Figure 5.7 indicates that the changes in the supply of prime time programs (OD) are
somewhat in conformity with audience demands. This tendency is even more apparent
from 1973-2002. In other words, commercial television broadcasters tend to supply
content that reflects audience’s demands. Nevertheless, both OD and RD levels are in
general low, ranging from 0.47 to 0.70 (public broadcast television provides OD ranging
between 0.63 and 0.83). What this implies is that the supply, attempting to satisfy
audience demands, doesn’t necessary provide a high level of diversity in general because
audience demands are not diverse. This result explains that the relationship between OD
and RD is somewhat reciprocal. If diversity of content is not supplied, audiences’ choices
are narrowed, simply because their demands for content are limited within that supply.
Inversely, if audience demands are not diverse, as shown in Figure 5.8, the changes of
supply that attempt to be in line with audience demands consequently wouldn’t provide
content diversity. The tendency of the change of supply lining up with audiences’
demands can be explained as commercial television broadcasters’ advertiser support
mechanism that provides content to increase advertising dollars.
The OD remained at a somewhat higher level during 1965-1970, ranging from
0.60 to 0.63; then it dropped down after 1974. However, it had been recovering diversity
again after 1974 and reached its highest with an OD of 0.66 in 1980. During 1980 and
1987, OD had again turned into a downward trend, and finally, it reached the lowest
diversity level in 1987. In analyzing the impact of market concentration on content
diversity during those years, based on the number of affiliates,, the initial assumption is
that increased concentration would result in a decline of OD and vice versa.
Remembering the previous analysis of market concentration based on the number of
140
affiliate share, the concentration level sharply declined until 1975; thus, it is expected that
the OD during 1965-1975 should have increased. However, as Figure 5.7 shows, the OD
had a downward trend during those years. Moreover, while the concentration level of
affiliate share maintained a somewhat similar level during 1975-1987, the OD during
these years shows a great fluctuation from an upward to downward trend. In general, in
spite of the overall decline of the concentration level, thus providing an increased
environment of competition, overall diversity hasn’t increased much over the years as
expected. This result explains that the concentration of number of affiliate share has not
had much impact on overall Open Diversity.
Moreover, the changes in the structure of programming share by producers don’t
seem to have an impact on overall Open Diversity. For example, previous analysis
evidenced the increased independent programming producers in1977, immediately after
the PTAR, yet the concentration level has rapidly increased with the decline of
independent producers throughout 1989, 1994, and 2002. From this perspective, the level
of OD would be expected to be high around 1977 and low in 1989, 1994, and 2002
respectively. However, the general trend of OD has been increasing since 1987-1993, and
1997-2000. Although a direct comparison between these two variables should be avoided
due to the incomplete data for the programming share by producers, it at least implies a
weak relationship between these two. This result is unexpected, which leads this study to
further analysis on OD and program changes, which occurred from 2000 to 2006. OD
was also calculated to determine content diversity. However, the program type categories
at this time were developed differently from the previous one analyzed above, in which
“Reality” is created as an additional category due to its rapid increase during the current
141
years. In other words, the proportion of Reality programs during the current year is too
large to be included in the category of Others.
Figure 5.8
Program Types Supplied by Networks during Prime Time. 2000-2006
variety
drama
movie
sitcom
quiz
news
reality
others
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
OD
2000
2001
2002
2003
2004
2005
2006
2000
0.61
2001
0.59
2002
0.58
2003
0.62
2004
0.66
2005
0.57
2006
0.48
Figure 5.8 shows the proportion of programs offered by commercial networks
during prime time from 2000 to 2005. In general, Drama takes up a major proportion
throughout all of the years followed by Situation Comedy and Reality, according to their
average, although Situation Comedy has declined while Reality has increased. Movie and
News also has declined throughout recent years. In 2005, it is obvious that Drama and
Reality account for a major proportion, taking up about 75 % of all programs. Figure 5.8
142
also demonstrates a great decline of diversity in 2005 with an OD of 0.48. The increase of
content diversity from 2003 to 2004 is largely attributed to the increase of Reality
programs. This tendency in part demonstrates a notion of ruinous competition, in which
competition is based on price over content in order to minimize cost. Although total
prime time program hours have been increased over years with the entry of new networks
such as FOX, UPN, PAX, and WB, they provided a combination of cheap and popular
programs. A disproportionately high amount of Drama, Reality, and Situation Comedy,
as is evident from Figure 5.8, demonstrates that commercial networks use cost effective
strategies, competing for price while duplicating programs. According to the FCC (2003),
advertisers pay a premium for a spot advertising on situation comedy while paying a
discount for advertising on the news. Similarly, the respectively high proportion of
Dramas and an increasing amount of Reality programming are related to the commercial
broadcasters’ cost minimizing strategy. The average production cost of drama and reality
programs is relatively inexpensive compared to the other programs (see Einstein, 2004a;
Sterling & Kittross, 2002).
Thus far, the analysis of content diversity during 2000-2006 has shown a
significant duplication of programs among commercial broadcast networks. The
duplication of programs in spite of increased competition, with the entrance of new
broadcast networks to the commercial television industry, in part verifies the assumption
that due to reduced audience size share, commercial television networks turn to cost
effective strategies, thus increasing competition results in less diversity.
Although commercial broadcast television remains the best medium for mass
advertising in the U.S., the decline of audience size and prime time audience viewing in
143
the commercial broadcast television industry is apparent, primarily caused by the advent
of new alternative forms of entertainment and the development of the newer broadcast
networks. In the early 1970s, CBS, NBC, and ABC attracted more than 90% of all
viewers, dominating audience share, but by the early 2000s, their collective share of
prime time viewing had dropped to 50 percent (Eastman & Ferguson, 2006). The
diminishing of audiences in the broadcast television industry over two decades is
represented in the Table 5.7.
Table 5.7
Average Network Rating. 1980-2005
Year
1980-81
1985-86
1990-91
1995-96
2000-01
2004-05
NBC
18.0
14.3
12.0
10.5
8.4
6.4
CBS
19.0
16.0
11.7
9.6
8.6
8.4
NBC
17.2
17.1
12.5
11.6
8.0
6.6
FOX
WB
UPN
7.3
6.1
5.3
2.4
2.5
2.4
3.1
2.4
2.3
Total
54.2
47.4
36.2
44.5
36.0
31.4
Source. Media Programming: Strategies and Practices (Eastman, & Ferguson, 2006).
Note. Estimates based on fall 2004 seasons
Table 5.7 indicates average broadcast network ratings that have been falling over the
years. Not only each network rating is declining but also the combined networks rating is
falling. The combined ratings for all networks, was less than 32 in 2004-05, which means
that less than two thirds of people are not watching any of these networks during the
prime time television season. Consequently, as the result indicates, the networks turned to
cost effective strategies and tended to homogenize content by offering cheap and similar
programs.
144
Audience Diversity
Several scholars have attempted to measure audience diversity, connecting
audience centrality to the democratic ideal of diversity in media (i.e.Napoli, 1997). The
democratic ideal of media diversity fairly explains the expressive function of media that
emphasizes the media’s reflection of audience demands (often called exposure diversity).
The centrality of audience diversity has been examined within the notion of the
marketplace idea, “the assumption that audience provided with a diversity of content
options will consume a diversity of content” (Napoli, 1997, p. 63). Therefore, audience
diversity entails the notion of inclusiveness of all ideas expressed by people (an exchange
of all ideas in open media forum). The attempt to create a well-functioning marketplace
idea, however, is often frustrated when the following assumptions are true: When
audience preferences or demands for program content are unbalanced, homogeneous, and
more importantly, subject to being a key factor for influencing advertising prices. Put
differently, in order to account for audience diversity as a democratic ideal, or to
emphasize the expressive dimension of media diversity, the diversity of audience choices
must sufficiently satisfy the following criteria: audience demands in selecting programs
(or expressions) are based on the rational (or balanced) selection and are less critical in
influencing advertising prices. Simply put, in spite of the importance of reflecting
audiences’ demands in media content in terms of public interest motivation, if their
choices are unbalanced and their demands are primarily used to fulfill the profit seeking
mechanism, then content diversity attempting to satisfy their demands will not fulfill the
diversity goal, that is innovative, substantive, and heterogeneous and thus is considered
quality content. In this way, the notion of market failure applies not only to the supply
145
perspective, but also to the demand perspective, which is the possibility of consumption
failure in demanding a particular content.
To demonstrate the trend of diversity in audience demands, the study examined
programs rated top by audience during 1965-2003. The Top 35 audience rated programs
reported by Neilson Media Research were examined. The Herfindahl Index (HHI) was
used to measure concentration of size distribution by audience choices by calculating
each program type’s shares (by percentage) of the total ratings points. The higher HHI
represents the greater concentration of audience selection on the programs, thus, less
audience diversity. “The Nielsen rating is the percent of all TV-equipped homes tuned to
the programs on an average night…the percent of all homes that had a TV were tuned
on” (Brooks & Marsh, 2003, p. 1455). The program categories developed for the
measurement of audience diversity are the same as used for program content. See Figure
5.9 for the audience diversity.
Figure 5.9
Herfindahl Index: Audience Diversity. 1965-2003
0.50
Audience Diversity HHI
0.45
0.40
0.44
0.41
0.36
0.35
0.33
0.30
0.29
0.25
0.27
0.25
0.20
0.15
0.10
0.05
20
03
20
01
19
99
19
97
19
95
19
93
19
91
19
89
19
87
19
85
19
83
19
81
19
79
19
77
19
75
19
73
19
71
19
69
19
67
19
65
0.00
146
Table 5.8
Audience Rating of Program Content: Top 35 Audience Rated Programs 1965-2000
Year
1965
1966
1967
1968
1969
1970
1971
1972
1973
1974
1975
1976
1977
1978
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
Variety
%
0.16
0.17
0.26
0.29
0.33
0.37
0.23
0.16
0.10
0.09
0.12
0.13
0.06
0.03
0.00
0.00
0.00
0.00
0.00
0.03
0.06
0.00
0.00
0.00
0.00
0.04
0.07
0.06
0.00
0.00
0.03
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
Drama
%
0.34
0.37
0.28
0.31
0.30
0.27
0.42
0.44
0.44
0.35
0.47
0.29
0.30
0.41
0.34
0.36
0.41
0.39
0.43
0.46
0.48
0.32
0.33
0.25
0.25
0.25
0.19
0.12
0.00
0.30
0.16
0.20
0.22
0.28
0.32
0.34
0.40
0.48
0.43
Movie
%
0.00
0.00
0.12
0.13
0.00
0.09
0.15
0.13
0.18
0.18
0.03
0.07
0.13
0.09
0.06
0.03
0.06
0.07
0.09
0.13
0.06
0.09
0.09
0.09
0.12
0.03
0.03
0.09
0.25
0.12
0.14
0.06
0.08
0.06
0.09
0.08
0.02
0.00
0.00
Sitcom
%
0.47
0.43
0.35
0.28
0.38
0.27
0.19
0.24
0.26
0.34
0.38
0.51
0.44
0.40
0.53
0.50
0.43
0.40
0.35
0.31
0.33
0.51
0.51
0.59
0.56
0.58
0.63
0.56
0.12
0.44
0.54
0.55
0.52
0.44
0.35
0.31
0.21
0.33
0.29
Quiz/Panel News/Info
%
%
0.03
0.03
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.43
0.00
0.00
0.00
0.00
0.00
0.00
0.15
0.25
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.03
0.04
0.04
0.04
0.07
0.07
0.07
0.04
0.04
0.04
0.04
0.04
0.04
0.04
0.04
0.14
0.17
0.10
0.09
0.15
0.14
0.18
0.21
0.09
0.03
0.12
0.03
Other
%
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.03
0.03
0.03
0.00
0.00
0.03
0.03
0.03
0.07
0.03
0.07
0.06
0.03
0.03
0.03
0.03
0.03
0.03
0.07
0.03
0.03
0.04
0.04
0.04
0.04
0.04
0.04
0.04
0.04
0.09
0.06
0.25
147
Figure 5.9 represents the overall trend of audience selection of programs over years while
Table 5.8 represents audience rating of program content based on top 35 rated programs.
Figure 5.9 demonstrates a high concentration of audience choices in its average, which is
even lower than HHI, 0.25 throughout whole years. This result leads to an interpretation
of less audience diversity with an unbalanced consumption. In detail, audience diversity
in the early years starts with a high level of concentration as evident from the HHI, 0.36
in 1965. As Table 5.8 evidences, the lack of audience diversity in this year is mainly due
to the absence of their choices in Movie, News and Others (children, sports, and reality)
whereas Drama and Situation Comedy were enthusiastically consumed by audiences.
This tendency is closely related to content supplied during that year where Dramas
dominate the lineups, comprising 44% of the programs, followed by 21% Variety, 16 %
each of Movie, and Situation Comedy, and only 3 % the other three categories. In other
words, the concentration of program supply could in part lead to the unbalanced
consumption. However, the concentration level reached a lower point in 1968 with HHI
0.26. This result is mainly caused by audiences’ extended selection of Movie programs
that were once widely available to audiences during the 1970s and early 1980s. In 1991,
the concentration reached its highest level with HHI 0.44. This is mainly due to their
preference for Situation Comedy that takes up 63% of their whole selections of programs.
Although the supply of program content in this year was almost equally proportioned
with Drama at 29%and Situation Comedy 32%, audience diversity was much less diverse
than content diversity. In 2002, audience diversity had somewhat increased with a lower
concentration of preferences in all programs except Variety. The general trend of
preference, however, shifted from Situation Comedy to Drama. This result reflects the
148
supply of programs that provided a large proportion of Drama, which increased from
29% in 1991 to 42 % in 2000. As Figure 5.9 shows, the audience diversity (or audience
selection of programs) in the most current year, 2003, has declined again with increased
concentration with HHI 0.33. This tendency stems from their unbalanced selection of
Drama, Situation Comedy, and Others (children’s program, and sports) with the absence
of the other four. The extinction of Variety and decline of Movies in supply during
current years, and noticeable increase of consuming Reality programs (belonging to
Others) have not only narrowed audience choices, but also led to the failure of audience
balanced consumption.
The general tendency of lack of audience diversity can lead to at least two
possible interpretations. The first is the idea that their choices are narrowed simply due to
an insufficient supply of program content (not the number of channels, but program
types). As previous analysis evidenced, program content supplied by networks was
concentrated on Drama, and Situation Comedy, and now, Reality programs. Another
interpretation is that audience consumption, regardless of the availability of content, is
inherently unbalanced due to their tendency to demand certain program types. The
second assumption in fact demonstrates the failure of consumption regardless of the
availability of various choices simply due to a lack of audiences’ rational choices in
selecting programs. This assumption also partially explains the notion of diminishing
return, in which the supply of wider program channel choices does not necessarily lead to
diversity of consumption. See Table 5.9 and Figure 5.10 for TV channels available and
actually viewed by audiences.
149
Table 5.9
Number of Channels Available and Viewed in the Average U.S. Home
Year
Average # TV Channels
Receivable
41.1
62.0
74.6
89.2
102.1
92.6
104.2
104.2
1995
1999
2000
2001
2002
2004
2005
2006
Average # TV Channels
Viewed
10.1
13.1
Na
Na
Na
15.0
15.4
15.7
Total # Commercial
TV Channels
1,161
1,216
1,248
1,302
1,303
1,341
1,361
1,375
Source. Data complied from A.C Nielson Co., in annual issues of Television audience
published in Stay tuned (2002), ITFacts General, Nielsen Media Research, & Television
& Cable Fact Book, published in Television Bureau of Advertising. TVB Online.
Figure 5.10
Channels Receivable vs Viewed. 2005
# channels
120+
20
157.8
111-120
16.5
115.9
101-110
16.3
105.8
91-100
14.6
95.4
81-90
16.9
84
71-80
15.6
75.5
61-70
15.4
67.1
51-60
14.4
56.2
41-50
12.5
45.1
31-40
6.6
24.9
20-
15.7
0
# channel viewed
9.3
35
21-30
# channel receivable
5
20
40
60
80
100
120
140
160
180
200
Source. Nielsen Media Research, National People Meter Sample, Aug. 29 - Sept. 4, 2005,
published in Media Info Center
150
Table 5.9 comparably represents average receivable channels and average channels
viewed by audiences along with the total number of commercial television stations over
the years. It indicates that the average viewed channels by audiences have maintained
steadily low levels, ranging from 10.1 to 15.7 although the average number of TV
channels receivable has greatly increased, from 41.1 to 104.2, with the enormous
availability of commercial channels that are over 1,000. An increasing competition
among channels in this way does not necessarily lead to increased viewership. Figure
5.10 provides a general fact of the relationship between availability of channels and
viewership by audience. In recent years, an increase in the number of channels available
to a TV household doesn’t seem to have the effect on the number of channels viewed. As
evident from Figure 5.10, after reaching the 50-channel level, there is no significant
increase in the viewership, which remains between the 15 and 19 channel range. Even
when more than 158 channels are available, the average number viewed only reaches 20
channels. This clearly demonstrates the notion of the diminishing return in terms of
competition among number of channels, where increasing competition in pursuing
pluralistic channels does not produce an increase of audience diversity although sufficient
levels of competition are necessary.
151
CHAPTER 6
FUTURE DIRECTION OF MEDIA DIVERSITY
As media diversity continues to be a central concern in communication policy
and research, scholarly attention to the concept of diversity and its assessment are critical
for an adequate implementation of the policy. This study provides a number of substantial
findings that have implications for constructing diversity principle and its assessment, as
well as communication policies on media diversity. As the critics suggested, diversity as
understood in the mainstream of the recent research literature focusing narrowly on one
aspect of program diversity would not be satisfactory. Responding to this concern, this
study attempts to penetrate the multiple dimensions of variety that constitutes diversity by
examining the following aspects (see Figure 6.1 for the theoretical underpinnings applied
to the study).
This study proposed the integrated theory of diversity, which could identify multiindicators of the dimension of the diversity, such as source, content, and audience
diversity; thus, it allowed assessment of the multi-levels within political and economic
contexts. The application of the public sphere model helped establish public interest
criteria and thus could provide more consistent policy goals in promoting media
diversity. The structural conduct model allowed assessment of source diversity
(ownership diversity) by identifying the relationship among the market structure
(concentration & competition) of the broadcast television industry, conduct (product
strategies), and performance (diversity). The application of the public policy model and
the program choice model allowed measurement of content diversity distinctively
produced by both public and commercial broadcast television by identifying different
152
programming strategies. See Figure 6.1 for logic of the integrated theory of media
diversity proposed by and applied to the study.
Figure 6.1
The Integrated Theory of Media Diversity
Audience Diversity
• Audience
Selection
Public
Policy
model
Program
Choice
model
Content Diversity
Content of
Supply
Content of
Demand
• Open Diversity
• Reflective
Diversity
Structure
Conduct
Performanc
e model
Source Diversity
• Competition
• Concentration
Public
Sphere
model
Media Policy
Public Interest Standards
• Regulation
• Free market
Competition
153
This study also found that the different strategies used in each of public and
commercial broadcast television industries, in turn produced different levels of diversity
(i.e., quality and quantity). Such discrete level of diversity raises a concern for the need
of developing a more specific assessment of diversity in a different market condition. All
these findings challenge the current foci of media diversity, and suggest an extended
study of media diversity as a means of developing an application of the most rigorous and
longitudinal analysis for future media diversity studies.
This study attempted to provide an ideal measurement of content diversity
combining supply (open diversity) and audience demand (reflective diversity)
perspectives, particularly in the commercial broadcast market where audience demands
are central in achieving economic goals. Yet, more importantly, the study found that in
reality, audience diversity (or ideal of expressive dimension of diversity) is abused by
media’s commercial purpose (e.g., advertiser-supported mechanism & cost effective
strategies), and also by audiences’ unbalanced selections of media content. This questions
the existing theory of the centrality of audience as to fulfill localism in promoting
diversity. Throughout the analyses on source, audience, and content diversity with an
application of the supply and demand perspective, the study suggests the needs for
critical inquiries in the following aspects.
Discussions and Suggestions
First of all, media diversity analysis in communication policies is inherently
flawed due to the FCC’s unclear definition of diversity, which in turn forestalls
establishing consistent policy goals in conjunction with monitoring policy effectiveness.
Second, public and commercial broadcast television fundamentally differ from each other
154
in developing their programming strategies, types of content, and level of diversity.
Third, audience demands are unbalanced and homogeneous; therefore, they insufficiently
fulfill the goal of connecting audience centrality to the democratic ideal of media
diversity (expressive diversion of media diversity). Finally, assessment of media diversity
entails a careful analysis of various dimensions that constitute media diversity. This
diversity is not a mere reflection of variety in media content because media principles
stem from multiple accounts of the historical root interrelated with social, political, and
economic variables. In this respect, neither the oversimplified approach of social theory
nor economic theory with a sole approach of either only qualitative or quantitative
measurement in determining content diversity would adequately explicate complex
dimensions of media diversity. Therefore, both disagreement and common consensus of
the standard should be abridged and highlighted to provide a more comprehensive
assessment for media diversity. The following suggestions for future media diversity
studies detail these four aspects.
Policy Goals and Developing Public Interest Standards
The study addresses that the FCC’s lack of establishing consistent public interest
standards is one of the major hindrances in terms of communication policies on media
diversity. Regulatory concepts (or philosophy) shifted when the public interest in societal
needs weakened as the basis for government decision making. The deregulation policy
during the 1980s, stimulated by changing competitive landscape of media industry, led to
almost no regulation in the 1990s. No programming requirement for public affairs and
educational programming that was once imposed by the FCC to inform citizens during
the past, explicitly demonstrate the FCC’s confidence in the belief that free market ideal
155
will meet diversity goals. However, with the vague ideals of the 1996 Act, “the FCC
continues to arbitrarily regulate and deregulate the telecommunication industries”
(Chambers, 2003, p.43).
Media diversity as fulfilling a part of public interest goals accordingly suffers
from an ambiguous concept, assessment, and implementation of the policy. This suggests
a critical need for defining government’s role in communication policy on media
diversity in order to protect the public interest on the basis of what might most benefit to
public (or civic), not private (or market individualism). With the clear establishment of
public interest standards for regulation, the FCC’s continual effort in monitoring policy
effectiveness, in conjunction with changes of content diversity, is critical as a justification
for implementing adequate regulatory policy on media diversity. Put differently,
establishing coverage areas that maximize the public good (societal demands over private
interest) should be the primary underpinnings for an implementation of communication
policies in terms of promoting media diversity.
The public sphere model, in this way, is very useful for developing a consensus
on public interest standards such as media diversity for regulation because this model
recognizes the fact that societal needs can’t be entirely met through a market system
where consumers’ purchasing power continues to be economically viable. As the study
exemplified, the advertiser-supported mechanism primarily operates the system of
distribution and production in the commercial broadcast television industry, and
audiences are mainly considered to be consumers instead of citizens. Consequently, this
mechanism hinders media from promoting the quality dimension of media diversity. As
this study evidenced, content became not only seriously homogenized in the most current
156
years, but also cheap and low quality programs, such as drama and reality increasingly
appear in the commercial broadcast program content. In this way, the core assumption of
the public sphere model anticipating the amoral practice of markets is validated to be
used as the chief guidance in establishing public interest criteria, such as media diversity.
As the public sphere model implies, the necessary and active role of government in
protecting public interest can be justified when government attempts to ensure that media
meet the needs of citizens, not consumers. Therefore, government regulatory concepts in
protecting public interest and promoting media diversity can be valorized only if public
interest motivation provides solid standards in serving the public good. Otherwise, the
same problem recursively occurs, albeit with justification of media industrial action that
abuses the expressive function of media (media reflects audience demands) for
commercial practices.
Furthermore, this study opens a discussion for the possibility of direct content
control in achieving the content diversity goal when the media market seriously hinders
media serving a public role. Since the ultimate goal in promoting media diversity is to
achieve diversity in the content, it is plausible to argue that regulating content is the most
effective means of achieving this goal. Nevertheless, it is also true that directly regulating
program content always faces onerous obstacles much more than regulating ownership
due to the First Amendment conflict, and this institutional system is barely challenged in
the U.S. However, when media market failure seriously threatens public interest and
antitrust policies alone don’t appear to be effective, then direct content control might be
inevitable in promoting diversity as a means of protecting public interests.
157
In fact, some Western European countries have implemented policies that
directly control content by demanding certain proportions of each program type. Einstein
(2004a) provides ample examples substantiating this content regulation in Western
European countries:
In the Netherlands, 25% of programming is dedicated to culture, 25 % to
information, 25 % to entertainment, and 5 % to education…In Germany, the two
public channels and regional channels are required by law to offer comprehensive
and integrated programs that is politically balanced… In Ireland, radio stations are
required to program news and current affairs as20% of their programming…
England also has some restrictions on programming in that regional companies
have to air programming all of the following categories: drama, entertainment,
sports, news, factual, education, religion, arts, and children. (Einstein, 2004a, pp.
211-212)
While America’s media system regulating content within a democracy (understood as
facilitating freedom, yet freedom of whose perspective is not quite defined) wouldn’t be
the same as other European countries, there is evidence of content regulation in children’s
programming, which has been successfully done in terms of promoting content diversity.
The Children’s Television Act “guarantees at least three hours of education TV every
week from every TV station” (FCC News Release, September 2, 1997). This three hour
guideline, indeed, replaced vague children’s educational TV rules with a clear rule to
enforce the statutory requirement that broadcasters serve the public interest. As Hundit
(1997) states, it is important to understand that broadcasters are public trustees and they
are mandated to serve the public. As the statutory requirement of children’s programming
158
has proven to be successful in promoting diversity, specific content control in other areas
in which broadcasters seriously harm the public might be taken into consideration.
Concentration and Competition in the System of Distribution and Production
In general, the logic of the classical economic market theory, a high level of
concentration ownership implies less pluralistic suppliers, reduces diversity of content;
however, as examined throughout the study, this negative correlation between high
concentration with less supply, and diversity of content is not always straightforward as
expected. It might be possible that large corporations may produce innovative and diverse
content better than small independent producers, and vice versa. Any contradictory
outcomes in this way will raise an endless debate on the effectiveness of diversity
policies on ownership and their relation to content diversity. In fact, as this study attempts
to argue, the dimension of media diversity is rather complex, influenced by multiple
factors. Any specific media market can support only a certain level of supply, which
raises concern in terms of not only numbers of producers (or suppliers) and the market
power if concentrated, but also how these suppliers will represent types of content that
satisfy various demands from different perspectives. Therefore, the variables that
influence media diversity should reflect the complex interrelationship among source,
content, and audience diversity (or supply and demand perspectives) with respect to
specific market conditions. Such attempts may entail investigation in the size of the
market, number of media suppliers, consolidation of resources available within a
particular market, and diversity of content that reflects the objectives of social demands
as well as the economic competitiveness of media firms. In other words, media diversity
159
should be assessed as compounding the effects of the various determinants listed above
for an adequate implementation of the policy on media diversity.
Throughout the analysis on diversity in commercial broadcast television, this
study suggests the economics of programming as a critical variable. Accounting for the
economics of program production as a key determinant in commercial broadcast
television entails a careful monitoring of programming strategies. Monitoring these
programming strategies may involve selecting content that targets a desirable audience
for the advertiser, determining reasonable costs for program types and time slots, and
evaluating the competition to determine scheduling strategies. The programming
strategies of commercial broadcast television largely rely on a simple economic formula
based on minimizing costs, and maximizing advertising dollars. To maximize the size of
the audience, the programming for advertiser-supported television is substantiated by
offering content that largely conforms to audience demands. Besides, in spite of increased
competition, the fact that the commercial networks provide similar content that is
relatively inexpensive exemplifies their program cost strategies based on the economics
of programming. This programming strategy will continue to shape content as less
diverse by targeting a mass audience, even if competition is increased. The major reason
for the negative relationship between competition and content diversity is verified by the
fact that the total average audience within a specific media market is rather fixed;
therefore, an increase of competition causes more fragmentation of audience share by
each firm. The study shows that as the general collective share of prime time viewing in
broadcast television has been declining so have advertising dollars. Therefore, it is
160
anticipated that more increased competition would motivate commercial television
networks to turn to cost effective strategies.
Furthermore, this study suggests a closer investigation of vertical integration
where networks can control production, distribution, and marketing system for profit.
Vertical integration explains the new media environment where networks were sold to,
and themselves were taken over by giant corporations (e.g., Viacom, Time Warner,
Disney, etc.). This vertical integration was mainly stimulated by broadcasters’ survival
strategies against diminishing broadcast ratings during the 1980s and 1990s. Since the
deregulation in the early 1980s, media competition has changed dramatically. A market
with a large number of different owners transformed a smaller group of similar owners
using corporate programming strategies to sustain a large share of the audience where
networks actually own the programs they broadcast. What this means is that the system
of production and distribution is operated, and controlled by the same giant companies
who own the networks.
As far as considering the corporate programming motive in commercial broadcast
television, whether networks produce programs, either internally, or externally by
acquiring them from independent producers, depends on profitability over quality
content. As the study analyzed, the primarily incentives for supplying programs largely
hinge on the network’s programming strategies aimed at minimizing costs and
maximizing profits by increasing the value of audiences for advertising dollars. This
assumption raises a critical question whether independent producers can actually produce
diverse programs by separately examining programs produced internally and externally.
If significant differences are dictated between them, then, it will strengthen the
161
establishment of the critical relationship between vertical integration and program
diversity, as to verify the assumption that vertical integration as a major culprit (or
indicator) hinders program diversity in the commercial broadcast television industry.
Therefore, the study suggests further interrogation on the differences of program content,
produced internally and externally for examining the effect of vertical integration on
program content. For that reason, the study has no intention to address the idea that the
distribution system should no longer be contributing to the flux of program diversity
although it failed to demonstrate a critical relationship between them. It rather suggests
the development of a sophisticated assessment that can closely interrogate the
interrelation among distribution, production, and market sale strategies. Although the
study finds that serious program duplication from 2000- 2006 is primarily caused by cost
effective strategies, this serious decline of diversity might be in part related to the effect
of vertical integration. Therefore, a closer inspection of the networks’ profit motives in
producing programming should continue to be one of the main indicators that hinder
media diversity.
Public Television and Promoting Quality Dimension of Diversity
The proposition of public television as a significant alternative to commercial
television in promoting diversity relates to an attempt to provide diverse content accepted
by the public; thus it works best for society. This proposition starts with an assumption on
the basis of the public policy model that social (or civil) forces have been marginalized.
The attempt to meet social demands and to inform citizens, in fact, is to define diversity
as quality (or diversity) to be optimized over quantity (variance) to be maximized. The
study demonstrates that diversity in public television follows the public policy model
162
(diversity as a normative criterion of quality) grounded in social theory, whereas diversity
in commercial broadcast television follows the program choice model grounded in
economic theory, or marketplace idea (diversity as expressive criterion). The major
difference between public and commercial broadcast television is apparent in terms of the
drives in programming, types of programs produced, number of channels offered, and
diversity level offered. The public interest motivation in public television is strengthened
with its non-commercialism, moral obligation to serve the public interest, and
decentralized system of programming. As the study demonstrates, the types of programs
offered by public television are mostly informational, cultural, educational, and
instructional, which is largely absent in the content offered by commercial broadcast
television. According to Einstein (2004b), the quality dimension of diversity in general
refers to diversity of important shows, including categories such as children’s, public
affairs, arts, and nature programming, as well as documentaries, all of which public
television primarily offers. On the other hand, it is very true that commercial broadcast
television offers a variety of entertainment content with a large number of channels. As
this study indicates, there are over 20 categories of program content types, with over
1,000 channels. However, program types are highly disproportioned in prime time, with
three or four program types dominating over the years, and the types of content mostly
provided (drama, reality, and situation comedy) are far from meeting diversity standards
that offer substantive and innovative content and encourage independent thought, even if
not popular. Instead, their offering of program content merely responds to the satisfaction
of large audiences.
163
Although the marketplace idea attempts to define diversity as fairness in giving
access to audiences (expressive function of media), the problem is that it basically obeys
a majoritarian rule that satisfies the immediate gratification of as many audiences as
possible (Hellman, 2001). More importantly, audience gratification in accessing ideas is
rarely balanced, nor is it on the basis of rational demands. The study’s attempt to propose
an idealistic evaluation of content diversity, combining both the critical and expressive
functions of media with the application of open and reflective diversity, is mainly
frustrated by the reasons stated above. All this proved that commercial broadcast
television grounded in the marketplace idea only meets “variety,” not “diversity.” This
assumption is further substantiated by different levels of Open Diversity (OD) where
public television tends to maintain higher level of OD than commercial television with
the higher Standardized D in a number of categories. In other words, the study suggests
that the diversity concept, the heterogeneity of content, must be defined by quality over
quantity to meet diversity standards. And obviously, public television can provide a
quality dimension of media diversity mainly because the nature of public television
follows the core assumption of the public policy model that clearly meets the quality
dimension of diversity as proposed.
However, this study suggests additional interrogation on the gradual decline of
Open Diversity in public television in conjunction with their commercial involvement,
that is signaled by increasing revenue sources from business industries. In spite of the
fact that the overall OD has remained high from the 1970s to the 1990s, the decline trend
was apparent over the years. This implies the possibility that this trend might be
significant after 2000 up to the most current year. Restricted funding from the federal
164
government, and minimal support from school districts and universities could direct
public television to become involved in commercialism. For example, public television
stations, after federal funding cuts in the 1980s, were allowed to give underwriting and
enhanced underwriting credits, which were virtually indistinguishable from commercials
(Sterling & Kittross, 2002). The assumption that maintaining high quality programming
is primarily due to its noncommercial principle in this way might be seriously weakened
by commercial interruption. In other words, the introduction of commercial
considerations to public television programming means a process of convergence of
content of public and commercial channels, which will certainly modify the content that
is offered by public television. Some specific examples related to this issue are, “a few
public stations seeking broader audiences at lowest cost, began to provide reruns of
former commercial fare” (Sterling & Kittross, 2002, 521), and National Geographic
Specials and Smithsonian appeared on higher-paying commercial network. Therefore, a
continual monitoring of public television programming strategies that include
commercial interests should be taken into consideration as to strengthen the proposition
of public television as a solution for promoting the quality dimension of media diversity.
Methodological Limitations
This project suffered from serious methodological shortcomings in the areas of
measuring concentration, content, and audience diversity, particularly in quantitative
approaches. The quantitative methodological approach used in the project is descriptive
in nature, following the same indices previously constructed in media diversity studies.
Although this project attempts to go beyond the quantitative descriptive approach in order
to explicate diversity in varying conditions along with the qualitative descriptive
165
approaches, it seems important to address the methodological shortcomings the author
faced during the analyses. Doing so may help future media diversity studies develop a
more comprehensive assessment of media diversity.
Virtually all of the quantitative descriptive approaches used in the measurement
of concentration, content, and audience diversity in this study have been limited by a lack
of appropriate statistical tests simply due to the nature of the data. The sample sizes are
insufficient to test the statistical significance and thus can’t report significant differences
with theoretically driven hypotheses as to be predictable. Consequently, the validity of
assumptions tested through the descriptive quantitative approach remains open to
questions. For that reason, it suggests a need for development of statistical assessment
that can go beyond descriptive. So far, media diversity studies have been largely
descriptive as opposed to predictive, and there have been a few which combined
statistical tests with their descriptive approaches. The statistical test is critical to verify
the assumptions, and to attribute variation in diversity to specific conditions.
Another methodological shortcoming relates to the Diversity Index that measures
content diversity. Any quantified content diversity measurements are not designed to
adequately assess the quality dimension of diversity. Although mathematical summary
indices could facilitate a better comparison of trends in programming overtime (e.g.,
HHI, Simpson’s D, etc.), theses methods can only measure the concentration of
programming across genres). In other words, they are more suitable to examine variety
across the types of programs by counting percentages or proportions of different
categories offered by each network. Although the Open Diversity Index provides a more
sophisticated assessment of content diversity than others, it still has a limitation in
166
accounting characteristics of the programs because it, just like other content diversity
methods, only accounts for different types of programs. The production quality and
overall sensibility critical to the quality dimension won’t be clearly seen, but can be
assumed from the types of categories provided. For example, the practice whereby
programs are frequently repeated, or genres, such as Reality Shows, associated with the
lowest standards in commercial television, might be enhanced by public television, can
be clear examples of inadequacy of the Diversity Index measuring the quality dimension.
Developing General Properties of Quality Content Criteria
The inquiry of the quality dimension of media diversity renders itself to
developing a general property of an outcome of a measurement along a scale of
assessment. However, the specific scale of assessment in terms of the quality dimension
hasn’t been fully developed in spite of rigorous debates on the quality and its essentiality
in the field of media diversity. The proposition of open diversity, in fact, was one major
attempt to define the quality assessment of media diversity, which conceptualizes media
diversity from the supply perspective. With the core assumption of media influence on
society, open diversity allows the measurement whether media content expresses
different opinions in an equal manner and in a sound way (Van Cuilenburg, 2000).
Nevertheless, as this study exemplified, the measurement didn’t sufficiently provide the
quality dimension explained above.
The quality is in need of further specification in order to be meaningful or to be a
useful concept. The suggestion for developing consistent public interest criteria is closely
related to this effort. Due to the inconsistency in establishing public interest criteria, the
quality criteria in the media diversity study has been audience share criteria normally
167
advanced by private commercial broadcasters (see Cavallin, 2000). As Cavallin notes,
“the trouble is that the specification of quality encounters a host of philosophical
difficulties, near or even superior to the notion of content” (p. 133). With the proposition
of one of the critical roles of media and media diversity as serving social duties (or public
benefits), this study finally suggests a critical need for the establishment of a quality
measurement in need of specification. The indicators for the specification of quality, as
mentioned above, broadly include the measurement of production quality and overall
sensitivity of programs, which may be further specified by several variables. The possible
variables to specify the indicators may include the measurement of the level of creativity,
fairness, accuracy, credibility, thoroughness, technical virtuosity, balance, artistry, and
innovation which all may tell content ability to stimulate, educate, inform, challenge, and
entertain (see Public Broadcasting Service, 2007, for editorial standards). The continual
effort to operationalize all these indicators will certainly help extend the quality
measurement within the diversity study as well as the establishment of quality criteria.
168
APPENDIX A
Corporate Ownership and Owned and Operated (O&O) Stations
NBC
Ownership
Operated as a unit of RCA until 1985, and RCA was sold to General Electric
(GE). GE maintains ownership of NBC.
O&O Stations
WNBC (New York), KNBC (Los Angeles), WMAQ (Chicago), WCAU
(Philadelphia), WRC (Washington, DC), WVJ (Miami), KNSD (San Diego),
WNCN (Raleigh-Durham, NC), WCMH (Columbus, OH), WJAR (Providence,
RI), & WVTM (Birmingham, AL)
CBS
Ownership
Laurence Tisch owned the company in 1986, and sold off assets unrelated to
broadcasting (CBS). CBS Records was sold to Sony in 1988 (CBS, Inc).
Westinghouse owned it 1996 (CBS Corporation).
O&O Stations
WCBS (New York), KCBS (Los Angeles), WBBM (Chicago), KYW
(Philadelphia), KPIX (San Francisco), WBZ (Boston), WWJ (Detroit), WCCO
(Minneapolis), WFOR (Miami), KCNC (Denver), KDKA (Pittsburgh), WJZ
(Baltimore), KUTV (Salt Lake City), & WFRV (Green Bay, WI)
ABC
Ownership
Capital City and ABC joined in 1985 with its merger. Capital City/ABC became
part of Disney in 1996, holding ownership of the ABC television, radio networks
and stations, and cable ownership in ESPN.
O&O Stations
WPIV (Philadelphia), WABC (New York), KABC (Los Angeles), WLS
(Chicago), KGO (San Francisco), KTRK( Houston, TX), WTVD (RaleighDurham, NC), KFSN (Fresno, CA), WJRT (Flint, MI), & WTVG (Toledo, OH)
FOX
Ownership
The Fox Broadcasting Company (FBC) is part of Fox television, a division of
New Corp. FBC owned network itself. Sister companies operate Fox Television
Stations (the station group), Twentieth Century Fox (the movie studio), Twentieth
Television (the television production operation).
169
APPENDIX A
(continued)
O&O Stations
WNYW (New York), KTTV (Los Angeles), WFLD (Chicago), WTXF
(Philadelphia), WFXT (Boston), WTTG (Washington, DC), KDFW (Dallas),
WJBK (Detroit), & WAGA (Atlanta).
170
APENDIX B
Public Television Programming Content by Categories:
1974-1996
Year
1974
1976
1978
1980
1982
1984
1986
1988
1990
1992
1994
1996
News/
Information/
Public
Skills
affairs
%
%
0.13
0.16
0.12
0.20
0.11
0.24
0.12
0.22
0.12
0.25
0.14
0.25
0.16
0.29
0.16
0.32
0.18
0.32
0.17
0.28
0.19
0.27
0.19
0.28
Cultural
%
0.18
0.21
0.22
0.21
0.23
0.20
0.21
0.18
0.19
0.17
0.16
0.17
Children/
Youth
%
0.11
0.10
0.09
0.09
0.08
0.08
0.07
0.06
0.06
0.15
0.20
0.20
Sesame
Street
%
0.21
0.18
0.16
0.16
0.15
0.15
0.11
0.12
0.11
0.11
0.09
0.08
Others
%
Instructional
%
0.04
0.04
0.05
0.06
0.05
0.06
0.02
0.01
0.01
0.01
0.01
0.01
Source. Data complied from Corporation for Public Broadcasting, Washington, DC,
Programming, published in U.S Census, and Stay Tuned (2002)
0.17
0.16
0.15
0.15
0.14
0.13
0.15
0.16
0.14
0.12
0.09
0.08
171
APPENDIX C
Program Codes for Commercial Broadcast Television
Variety
Special/Varied
Comedy
Country and Western
General talk
Music
Drama
General
Women’s serials
Action/adventure
Crime/detective
Suspense
Westerns
Animated cartoon
Motion Picture (Movie)
Situation Comedy
Quiz and Panel (Audience participation)
News and Information
Newscasts
Forum/Interview
Documentary/Information
Others
Children show
Sports
Reality*
Note. *Reality program was independently created for the analysis of the content
diversity during 2000-2006.
172
APPENDIX D
Commercial Network Prime-Time Program Types: 1965-2002 (by 30 minutes per
week)
Year
1965
1966
1967
1968
1969
1970
1971
1972
1973
1974
1975
1976
1977
1978
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
Variety
31
27
26
31
29.5
35
15
16
12
6
10
19
14
18
8
12
9
4
3
7
7
1
0
7
2
2
6
0
5
0
2
3
6
11
10
6
10
9
Drama
66
69
70
64
44.5
55
49
48
47
68
72
57
66
58
60
54
60
52
58
76
78
70
80
66
68
64
46
65
52
66
72
72
74
80
93
87
96
98
Movie
24
28
24
28
27
27
36
35
39
33
26
34
22
32
28
24
20
36
20
20
20
24
18
24
22
24
28
24
28
28
28
28
16
20
22
32
18
24
Sitcom
24
21
20
22
22
24
22
21
24
15
20
16
24
17
24
24
29
28
21
21
19
29
36
34
38
49
50
50
47
41
54
61
62
55
43
41
42
41
News/
Info
Quiz
3
3
2
2
3
2
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
2
0
0
2
0
0
2
8
13
0
2
2
4
2
2
2
0
2
0
0
0
3
2
3
8
14
10
8
8
4
4
4
4
8
10
8
12
10
20
18
20
16
22
26
26
20
12
16
Others
0
0
2
0
0
4
4
4
4
4
4
4
4
4
4
4
4
4
4
4
4
4
4
4
10
9
14
11
8
9
8
6
8
12
12
14
17
20
Total
150
150
148
149
128
149
126
126
126
126
132
133
132
132
132
132
132
132
114
132
132
132
142
143
150
156
156
160
162
162
184
188
188
204
208
208
208
208
173
APPENDIX D
(continued)
Variety
%
21
18
18
21
23
23
12
13
10
5
8
14
11
14
6
9
7
3
3
5
5
1
0
5
1
1
4
0
3
0
1
2
3
5
5
3
5
4
Drama
%
44
46
47
43
35
37
39
38
37
54
55
43
50
44
45
41
45
39
51
58
59
53
56
46
45
41
29
41
32
41
39
38
39
39
45
42
46
47
Movie
%
16
19
16
19
21
18
29
28
31
26
20
26
17
24
21
18
15
27
18
15
15
18
13
17
15
15
18
15
17
17
15
15
9
10
11
15
9
12
Sitcom Quiz/Panel News/Info
%
%
%
16
14
14
15
17
16
17
17
19
12
15
12
18
13
18
18
22
21
18
16
14
22
25
24
25
31
32
31
29
25
29
32
33
27
21
20
20
20
2
2
1
1
2
1
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
1
0
0
1
0
0
1
4
6
0
1
1
3
1
2
1
0
2
0
0
0
2
2
2
6
11
8
6
7
3
3
3
3
6
7
5
8
6
12
11
11
9
12
13
13
10
6
8
Others
%
0
0
1
0
0
3
3
3
3
3
3
3
3
3
3
3
3
3
4
3
3
3
3
3
7
6
9
7
5
6
4
3
4
6
6
7
8
10
174
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